Many startups had already recently laid off a large number of employees. They all of a sudden fired thousands of employees. The businesses are distinct, but the reason is the same.
Several organisations predict a severe recession. Costs must be reduced in order to prepare for bad days. And, for the overly funded startups, the simplest way to cut costs is to lay off employees.
They may not stop spending money on IPL ads, may not find efficient systems, and may continue to invest in other loss-making startups, but they will lay off employees who have given their all to them and believe in their future.
But, whether today or tomorrow, this was bound to happen and will continue to happen.
The sole advantage of tech companies over traditional businesses is that they can replace humans with technology in operations, resulting in increased efficiency and cost savings.
However, until their technology is fully prepared, they will require humans to gain momentum and become a household name. So, hiring is required.
Other reasons include the need for them to reach the tipping point and make it out. They need agents and telecallers to get users, but once they have initial testers and promoters, they no longer need them. Everyone is aware of the startup and what it does.
Aside from that, they hire based on their growth projections. However, most of the time, the requirement fades away due to slower growth, cost-cutting, or the implementation of more efficient systems in the interim.
They hire people, put them to work, and then fire them when their replacements are ready.
This would happen at large scale with various delivery companies being replaced by drones, as well as cab aggregators being replaced by self-driving cars. Other industries are included in this list as well.
And, if you think it’s too far away or that Bharat can’t do it, remember what you thought of online payments 5 years ago.
There is nothing wrong with startups expanding rapidly. However, it is incorrect if they do not include employee security in their priority list or problem statement.
Startups solve problems; they are creative individuals who solve problems. They are visionaries. They created the problem of layoffs; shouldn’t they also solve it? Shouldn’t they think about it sooner and be prepared to help them or find other roles to them in the company or outside?
Bill Gates once stated that he wanted Microsoft to have enough cash reserves to continue working on R&D and pay employees’ salaries for a year.
He was cautious about hiring at the time because he recognised that the people who came to work had responsibilities to their families, and Microsoft should be accountable to them.
Not much about Gates, but the same logic should apply to startups.
Consider your employees; otherwise, employees who see their colleagues being fired will never feel secure and may never work at their best. Give them safety and peace, and they will give you their allegiance, blood, and sweat.
