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Are Mass Layoffs in Software Companies Inevitable?

Are Mass Layoffs in software companies Inevitable? | blog

Layoffs are sometimes inevitable for the survival of the company. This may be due to a number of reasons like economic crisis, a change in business strategy or the company reorganization. What matters most during these layoffs is how the software companies carry out this process with minimal damage to employees and the company’s brand.


Are Layoffs Inevitable?

When there is economic crisis, the software companies downsize its members to cut operational costs and improve efficiency. The recent Covid’19 has triggered layoffs in various reputed and popular software companies. The company would have hired the workforce needed for the projects at the time of higher demand. But then the situation might have changed where the companies have lesser projects than before. So they try to reduce excessive workforce by doing layoffs.

As the technology continues to evolve, there is a need to replace the human labor work with automation or robotisation. So the same work can be done quickly and in a cost effective manner. The software companies also continually assess the performance of the employees to check if the employees meet certain standard or not. So if the employees do not perform well, there is a chance they get laid off during the crisis. Some software companies merge with other to gain competitive advantage, increase market share and improve growth. This leads to job losses for employees in redundant areas of the combined company.Is Mass Layoffs the only Solution?

Mass layoffs is not the only solution in all cases. There are various other alternatives like freezing hiring process, providing unpaid vocations for a month, shortening working hours, offering work from home (reduces electricity, water and other office supplies costs.), asking for volunteers to exit from company, cutting unnecessary expenses and doing selective termination.


So to conclude, though mass layoffs are not easy, they can be handled correctly. If the companies plan for layoffs, they should plan ahead, take responsibility and establish proper communication in a professional and organized manner. The companies should also think of other alternatives to make this process smooth and comfortable for employees.

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