The current wave of layoffs sweeping across various industries is a stark reflection of the complex economic challenges we face. A confluence of factors has created a perfect storm, forcing companies to make difficult decisions and leaving workers facing uncertainty.

Typically, there are employees who remain in the company even after a massive wave of layoffs. This can lead to feelings of guilt and pity towards co-workers who got laid off from work. For those who got laid off, there are feelings of stress and anxiety. It’s terrible to lose a job and not have economic and financial stability afterwards.

Layoffs and the shifting employment landscape

One of the primary drivers of layoffs is the global economic slowdown. Inflation, fuelled by supply chain disruptions and geopolitical instability, has soared, prompting central banks to raise interest rates. This, in turn, has increased borrowing costs for businesses, stifling investment and curbing economic growth. Consequently, companies are tightening their belts, scaling back operations, and ultimately, reducing their workforce to maintain profitability.

The technology sector, once a beacon of seemingly limitless growth, is now experiencing a significant contraction. During the pandemic, tech companies embarked on aggressive hiring sprees to meet surging demand for digital services. However, as the world returns to a semblance of normality and growth moderates, these companies find themselves overstaffed.

This has led to widespread layoffs, particularly in areas like e-commerce, online advertising, and cryptocurrency, where the pandemic-driven boom has subsided.

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According to Crunchbase’s job cut tracker, layoffs more than doubled in 2024 compared to 2022, with over 191,000 workers losing their jobs in US-based tech companies. This reflects the continued slowdown in the tech sector and broader economic concerns.

“There is a herding effect in tech … The layoffs seem to be helping their stock prices, so these companies see no reason to stop,” University of Washington business professor Jeff Shulman told NPR earlier this year. “They're getting away with it because everybody is doing it. And they're getting away with it because now it's the new normal.”

The relentless march of technological advancement is playing a role in this trend. Automation and artificial intelligence are transforming industries, enabling companies to achieve higher levels of productivity with fewer employees.

While these technological advancements hold the promise of long-term economic benefits, they also contribute to job displacement in the short term, as machines and algorithms increasingly take over tasks previously performed by humans.

Adding to the anxiety is the looming threat of a recession. The combination of economic slowdown and persistent inflation has fuelled fears of an impending downturn. Companies are reacting proactively, reducing costs and streamlining operations to prepare for leaner times. This often translates into preemptive layoffs, as businesses seek to mitigate risk and ensure their survival in the face of potential economic hardship.

Also Read: Rocked by layoffs? 5 ways to keep the ship steady

Ways to support laid-off co-workers

It’s challenging to support others in difficult times, particularly colleagues who got laid-off. It’s possible that you don’t know what to say and you’re afraid that you might exacerbate what they’re feeling.

If your colleague has been laid-off and you want to provide support, here are things you can do:

Offer emotional support

Reach out with empathy. Acknowledge your colleague’s feelings and provide reassurance about their skills and worth. Remind them of what they can do and how far they’ve come in their career. Tell them it’s not too late to find something new.

Stay connected

Regularly check in through texts or calls to maintain the relationship and show you care. Just don’t be overly-positive when you communicate with them. Don’t tell them that they should just look on the bright side because it will invalidate their feelings.

Assist with job search

Help them network, review resumes, or prepare for interviews, offering concrete assistance rather than vague offers. Send them links to job opportunities that match their skills and capabilities.

Provide references

Be willing to serve as a professional reference, highlighting their strengths to potential employers. Tell them their strengths and weaknesses so they can improve upon them.

Encourage self-care

Ensure they are taking care of their well-being during this stressful time. Having a wellness break is important as they prepare for their next career journey.

Massive layoffs are undoubtedly a cause for concern, creating anxiety and hardship for many. However, it's crucial to remember that economic cycles are a natural part of the system.

While some sectors contract, others will inevitably expand, creating new opportunities and driving future growth.

The key lies in adapting to these changes, investing in skills development, and fostering resilience in the face of economic uncertainty.