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Seeing Silicon | Stealth layoffs: In the Valley, you’re out of a job, but silently

Oct 06, 2024 08:00 AM IST

Meet the era of stealth layoffs, where tech companies are letting employees go, without the fuss or the headlines.

At a party last month, I bumped into two people looking for a job. They had just been fired from two of the Big Tech in Silicon Valley and were now looking for new opportunities. One was told their job was to be eliminated; the other’s project was shutting down. Both had been given a severance package and a couple of months to find a new job – only if they would keep quiet about it.

If 2023 was the year of splashy layoffs, 2024 seems to be the year of stealth layoffs in tech companies.(Pexel) PREMIUM
If 2023 was the year of splashy layoffs, 2024 seems to be the year of stealth layoffs in tech companies.(Pexel)

Layoffs.fyi which is run by a startup founder and has been tracking layoffs in the tech industry since Covid-19, reports that so far in 2024, 139,206 employees have been laid off in 451 tech companies. Compared to the massacre in 2023 (2,64,200 layoffs in 1,193 companies), this year is better. But what is surprising is how the layoffs are not making any news.

It’s a new strategy in the tech industry that has learnt from its debacles in 2023. In the beginning of 2023, two months before the annual bonus and just when people were back from their holidays, Google announced worldwide layoffs and sacked employees overnight. It got terrible press as it had sent out the layoff email at 2 am in the morning. Many employees found out the next morning at their office when their badges didn't work.

Rather than the number of layoffs, it was the way it was done that turned into a PR nightmare for the company. Scores of employees wrote on social media, many international media covered it and the company got bombarded with negative press. A few months after this, in April, Elon Musk took over Twitter (now X) and dramatically announced that he would cut over 80% of the staff. Many people were laid off, while some continued to work in dire working conditions – again a lot of negative press, perhaps the reason that X’s valuation has plummeted recently.

This year, the companies have learnt to do it quietly. If 2023 was the year of splashy layoffs, 2024 seems to be the year of stealth. Stealth layoffs or silent layoffs as some people prefer to call them, are in which a company offers severance pay on the condition that the employee keeps quiet about the details of their exit. This way, the company can protect itself legally without any media noise.

As part of the strategy, companies stagger their human resources shedding. One employee here, one there, one project here, one team there. When Cisco let go of 5600 employees and Intel laid off 15000 employees in August this year, it made news. But when Apple let go of a 100-person team, or when Lyft laid off 30, or Udemy 280, this hardly made news. It was just a team in many, a person in a big project. It was too small a number.

Many times, stealth layoffs are so silent that even other employees or co-workers of the company don’t find out there’s been a layoff within their team. Since getting fired is taboo, the employee who has been asked to leave doesn't talk about their firing, choosing instead to quietly find another job.

This staggered way of doing layoffs makes it easier for tech companies to shed extra employees without the bad press or undue media attention. Something that the big tech wants to avoid especially as fear floats around AI agents taking over white-collar jobs. Employers are also hoping that these gentler firings – with a severance package and a couple of months of work – will create goodwill among ex-employees. Overall, it also doesn’t affect the company’s other employees inversely. Win-win for all, right?

Except that it might be getting sneakier still. Another technique that big companies are using for stealth layoffs is a Return To Office (RTO) mandate. Recently, Amazon announced that their employees will need to be at the office, five days a week, from January 2025.

Some of the employees I spoke to, especially women, are wondering what to do about it. Thanks to remote work, they’ve bought homes further away from their workplaces, or have built their lives around working remotely. Some employees have been forced to look for another job that offers remote working. Is that exactly what executives are hoping for? According to a 2024 survey done by BambooHR, 25% VP and C-suite executives admitted they hoped for some voluntary turnover during an RTO. This is especially beneficial to companies as they don’t even need to give severance pay, don’t get exposed to legal issues and get a leaner workforce without the bad press.

With the US election around the corner and the end of the year nigh, there would be more layoffs as tech companies work on their next year’s budgets in a world where the AI hype is seeing some correction. But will we find out about these layoffs? Perhaps we need an AI agent to start tracking layoffs in real time.

Shweta Taneja is an author and journalist based in the Bay Area. Her fortnightly column will reflect on how emerging tech and science are reshaping society in Silicon Valley and beyond. Find her online with @shwetawrites. The views expressed are personal.

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