'Poorly executed' layoffs aimed at quickly cutting costs could hurt firms' image and spark staff exodus, say experts

SINGAPORE — From locking employees out of their emails to firing them while they were in the middle of a business trip, the manner in which employees in the technology field have been brutally axed in recent days is a way to quickly cut costs but is not an industry norm, human resources (HR) experts said.

These practices are also not confined to tech companies, where their reputations may have taken a hit from the way the layoffs were conducted, the experts added.

Many employees of tech giant Google, the latest tech firm to retrench its workers, have taken to social media to criticise the abrupt and impersonal nature of their terminations.

Some employees found out that they had lost their jobs after they were logged out of their corporate accounts, while others realised only when they could not gain access to their office.

Google was not the only tech firm in recent days that has been criticised for the way it laid off workers. Late last year, Twitter employees in Singapore had been assured there were no plans for layoffs, only to receive a blunt email later about job cuts and finding themselves locked out of company systems within hours.

Experts said that the practice of sudden layoffs can happen in any industry though anecdotally, tech companies have been doing more of this.

Veteran HR practitioner Adrian Tan said that the frequency of mass layoffs can vary depending on the economic conditions of the company.

“The practice of sudden layoffs, also known as 'mass layoffs' or 'mass terminations', is not a new phenomenon and can happen in any industry. Some companies have been known to use these methods as a way to quickly cut costs, but it is not considered a norm.” 

Mr Tan added that social media has also made it easier for people to share their experiences, thus giving the impression that such layoffs are becoming more common.

Alluding to this, career coach Adrian Choo said: “Social media has amplified the voice of the displaced employee, but if the impacted staff are treated fairly and respectfully, there would be no blowback at all.

“Many large companies have conducted compassionate layoffs and have stayed out of the news. These are the ones you never hear of.”

SECONDARY EXODUS

Brutal axeings of employees can undoubtedly have many impacts, in addition to affecting the company’s reputation.

HR leaders Aslam Sardar and Carmen Wee wrote in a commentary for news channel CNA that retrenchments must be managed properly not just out of compassion since livelihoods are at stake but also to “reduce reputational risks and preserve brand value” to prospective and existing talent.

They added that if layoffs are badly executed, organisations risk losing employees they wanted to retain, which can cause a manpower crunch that could be hard to recover in time when growth returns.

In some markets, regulators frown at companies that fire and want to rehire equally quickly because they signal a lack of commitment, the pair wrote.

Agreeing, Mr Choo said that the harsh treatment of employees during layoffs can even cause a “secondary exodus”.

“Even though companies may not care about exiting staff’s morale, in truth, the talent they want to keep, such as those staying behind, is quietly observing the process and getting very nervous,” he said.

“If the layoff is poorly executed, the bad feelings will translate to a secondary exodus of staff in no time.”