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Elon Musk’s highly publicised mass redundancies, with nearly 50% of the global Twitter task force made redundant overnight, sent waves worldwide.

Amazon, Google, Salesforce, and most recently, Microsoft are joining the ranks of Twitter, which also announced massive layoffs causing major panic across the board. Despite the worrying numbers and uncertainty, the need for tech talent remains steady across all other sectors. The question remains whether this will trigger a domino effect in the market and how companies should approach this situation.

Tech layoffs have been making the global news lately. It’s seen as an opportunity for recalibration, with promising opportunities for both businesses and talent.

Cost-cutting pressure and rising inflation, coupled with a looming recession and rising interest rates, have forced tech companies to lay off huge numbers of employees or freeze recruitment towards the tail end of 2022.

Tech companies started a hiring spree at the height of the pandemic, estimating that the online business would continue to grow at least at the same rate. This led to tech companies seeing a drop in revenue, and employees’ salaries suddenly became too expensive. However, in 2022, the internet boom started to fizzle, and face-to-face interactions slowly returned. Tech companies had to offer excellent remuneration packages to attract new hires.

More and more employees are returning to offices, and people are spending more money on services than on goods. The market became even more competitive, creating a war for talent called the ‘The Great Resignation’.

The hiring freeze could create an opportunity for companies to revamp their hiring process and draft and implement suitable and attractive HR policies in line with the current trends and demand. Mary Blake, Head of Talent Acquisition at Employsure, commented, “Businesses that rely on tech should take this opportunity to consider insourcing their tech services.”

Undoubtedly, Tech layoffs could hurt industries dependent on technology and their employees. In addition, the entire business might be affected, leading to more layoffs or a hiring freeze. Almost every industry has a tech component they rely on, from retail to construction to hospitality. If companies can no longer provide services at the same level and use the same IT infrastructure, investors will be more cautious about investing.

This would mean employers must invest in developing and fine-tuning their recruitment processes. Midst the current tech disruption, the question remains as to what businesses can do. Employers should also closely review their existing remuneration packages for potential candidates. However, there is a potential silver lining to the layoffs.

HR departments play a crucial role in determining the attrition rate; therefore, it is essential to train HR employees to observe what is causing a high or low attrition rate and propose measurable solutions. There is a strong sense of gauging a company’s culture and values system, and robust HR policies mean employers have every opportunity to recruit well.

More candidates are interested in knowing if a company has implemented policies that include diversity, equality, and inclusivity in addition to employee benefits and entitlements. Providing superior training for HR employees could ensure better hiring practices allowing recruiters to seek and hire the best candidates following the business’s needs.

Notwithstanding the above recommendations, a complete review of existing policies should be undertaken. Employers should invest in their HR department.