The great IT meltdown: Layoffs, salary cuts, downsizing

Recession is a primary factor where organizations are trying to reduce costs with layoffs. It is a primary knee-jerk and traditional method of cutting costs with reducing revenue.

By Newsmeter Network  Published on  25 Jan 2023 2:50 AM GMT
The great IT meltdown: Layoffs, salary cuts, downsizing

Looks like the momentum of news started picking up on layoffs at major IT Giants, FAANG, and beyond. Until now, only Apple has not announced any job cuts. On average 1740 jobs have been lost in November 2022 followed by 2400 jobs lost per day until January 24.

There are various factors for this sudden recession. These include an abnormal increase in the cost of resources with few job profiles getting a hike of 100%, job automation (DevOPS, SecOPS), HR, Project and people management, offshoring of jobs with higher cyber security, and compliance which was adopted during Cloud including Muskian syndrome or copy cat syndrome.


Source: layoffs.fyi

Tech Layoff 2022-2023

Month

Companies w/ Layoffs

Employees

Average daily layoffs

November 2022

222

52145

1740

December 2022

131

10327

333 (holiday month)

January 2023 (24th)

179

57550

2400

Recession is a primary factor where organizations are trying to reduce costs with layoffs. It is a primary knee-jerk and traditional method of cutting costs with reducing revenue. It is a traditional old-school method.

There was an unusual increase in compensation post-Covid where automation methodologies like DevOps removed the barrier of software development, testing, and operations into a single silo. This was a gigantic change with seamless integration of the entire software development cycle with an ever-growing demand for rapid and quick deployments.

Needless to say, many high-paying leaders were getting released with the integration of teams. This began with the adoption of the cloud which comes with built-in tools for seamless automation. To give an illustration, a team of 100 in the traditional model including many sub-teams of software developers, testers, production support, system admins, dba`s including managers, is reduced to 10 with Cloud adoption.

The very initiatives which were driven by managers made them redundant. Another example is supporting functions like HR, Project, and People management with the adoption of SAAS tools. Many of these job tasks have been automated. Blame Covid it was the biggest catalyst for digital /cloud transformation for many organizations. WFH / Work from anywhere made employees independent to perform their work and deliver on time. Many line manager functions including the annual appraisal process have become automated. Work from home enabled cyber security for company devices. Many homes have stronger backup internet and firewalled, thus saving the cost of office space.

Last but not least is a copycat syndrome or Muskian syndrome where leaders emulate others in the business. If Twitter can run with 25 percent of the staff, why not us? Just do it, let’s hire if needed later. Knowledge is no more with individuals with the easy technical onboarding process. There is always an opportunity to replace young minds with fresh ideas that can cater to current customers.

It’s all about Darwin’s theory of survival of the fittest. In technology terms, update your skills and be employable always. The top is always tough in the organizational pyramid. Go back to your keyboards. With the advent of ChatGPT and GPT3 with openai, the entire paradigm shift is happening for software development. it’s going to impact everyone. Will come back with a detailed article later.

Authored by Madala Venkateshwarlu- A Science graduate with an IT experience of over two decades years covering Cyber Security, Compliance program, Cyber security awareness, Data Security, Privacy and security Consultant at IT Corporations including Major US Clients, Indian Clients.

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