Turnover contagion, bad rep, low morale: Why layoffs will only come back to bite tech firms
The doom and gloom from last year has followed us into the new year with the worldwide tech layoffs still in full swing in the first few weeks of 2023.
According to data compiled by layoffs.fyi, about 26,061 employees have been laid off by 104 tech companies. This suggests that 2023 is on pace to surpass 2022 for global tech redundancies, close to the early days of the COVID-19 pandemic.
Among this year’s high-profile layoffs include SalesForce, which plans to cut off 10 per cent of its workforce by 2024, and Microsoft, which plans to retrench a number of employees in its engineering divisions.
These layoffs could have all been prevented — if only these tech companies realised that the rapid upsizing of their companies during COVID-19 was unsustainable.
As more people turned to technology due to the lockdown and work and play were digitalised, most tech giants believed that this would be the “new normal”. Hence, these companies went on a hiring rampage to up their game in this field.
But nothing good ever lasts. In fact, these trends took a sharp turn last year.
Facing economic headwinds such as war and inflation, these tech giants have seen a significant slowdown in growth, causing them to scramble for an effective way to cut costs.
Short-run gains, long-run losses
“Labour costs are usually the first thing that goes when companies cut costs, aside from advertising and marketing,” Dan Wang, an associate professor at the Columbia Business School, told Business Insider.
While there are other ways to cut costs, such as putting promotions on hold, most of these companies have resorted to layoffs as a quick and convenient way to cut costs.
But can laying off employees be the solution for companies to increase their revenues?
Contrary to the popular belief that layoffs can help reduce the financial burden of businesses, layoffs don’t usually reposition a firm towards growth.
In fact, when Nokia resorted to the same strategy to retrench thousands of its employees worldwide as its mobile phone business was declining in 2008, the company ended up spiralling into a deeper financial crisis.
This is because all companies gain from retrenching their employees is a short-term accounting bump which looks good on paper, appeasing the shareholders of these companies. In the long run, these companies would often need to deal with more negative consequences as compared to positive ones.
According to Josh Bersin, it would take a company a year or two to “recover” from the negative effects of a layoff, and some of these companies never return to pristine growth.
A string of resignations
With the current volatility of the tech industry, employees in almost every other tech firm are feeling the heat.
As more of their colleagues are laid off, the remaining employees of these tech firms may start questioning their own career trajectories and hunt for other job opportunities, causing a ripple effect.
Coined the “turnover contagion”, a report done by Visier found that employees are 7.7 per cent more likely to leave a company after a termination or an “involuntary resignation” occurs within their team. This percentage is exacerbated to 9.1 per cent if the resignation was voluntary.
Furthermore, this phenomenon is more likely to occur within smaller team sizes in an organisation — employees who work on teams of two are 25.1 per cent more likely to quit once their team member resigns, compared to 14.5 percent for teams of six to 10, and 7.9 per cent for teams of 11 to 20.
This is due to “strong interdependencies and personal relationships between co-workers in smaller teams”, Visier’s principal of research and value Andrea Derler told CNBC Make It.
Hence, with the lack of manpower, companies would have to scramble to rehire their former or new employees — similar to how Twitter asked its former employees to return after laying off about half of its workforce after Elon Musk’s takeover.
Multitasking may be a desirable trait, but it reduces prodcutivity
As a company lays off more of its staff (and triggers a ripple effect), the remaining employees would have to wear many hats to fill the roles of former employees.
These employees would unfortunately struggle to fulfil these roles due to the knowledge loss from retrenched employees.
Although in recent years, multitasking may seem like something that is expected of you at a workplace and is often listed as a desirable trait on job descriptions, multitasking is, in fact, counterproductive when it comes to workplace performance.
According to several studies and researches, employees that multitask would have their productivity reduced by up to 40 per cent, which, in turn, often leads up to a drain on workplace morale.
This comes with a high price tag — a disintegrating workplace morale is the fuel that feeds the fires of employee discontentment, workplace conflict, and absenteeism within an organisation, leading to an overall plunge in profits of a company.
In contrast, organisations with higher workplace morale show 17 per cent greater productivity, and report up to 41 per cent lower absenteeism rates and 21 per cent higher profitability than other companies.
The costs of hiring and training new employees
Companies often underestimate the skills and knowledge they send out the door as they retrench employees.
When business conditions rebound, these firms would have to ramp up their employment for the business to grow, leading to snowballing costs of rehiring, training and orientating new hires.
Productivity would be lost to the adjustment period (or training period) of new employees, the time spent by the rest of the company’s employees to assist newcomers, as well as the time lost by managers to recruit these new hires.
From background checks, to interviews, and integrating the employee into the company, the dollars start adding up quickly as a company hires new employees.
As a matter of fact, between 2020 and 2021, companies have spent over US$92 billion on training alone, and it can take up to six months (or more) for a company to break even on its investment on a new hire.
The power of social media
The reputation of a company is the result of the perceptions of consumers from an external view. With the global reach of social media, news of layoffs — and how it is executed by a company — would spread rather easily.
From unexpectedly receiving an email about their retrenchment, to being informed via Zoom and text messages, employees are sharing their experiences on being laid off by these tech giants, with some likening them to a “slap in the face”.
As news of these retrenchments spread across social media sites such as LinkedIn, more consumers are wary of these tech giants, which directly affects these companies’ bottomline.
When potential customers find one negative article on the first page of their search results, business are at risk of losing 22 per cent of business.
In addition to this, consumers tend to trust consumer-written reviews of a company over posts by brands or companies — meaning that the experience shared by these retrenched employees hold a lot more weight, directly affecting a company’s reputation.
In the long run, the tarnished reputation of these businesses would also hinder them when it comes to hiring. With sites such as Glassdoor displaying reviews from former and current employees, up to 69 per cent of job seekers would reject a job offer from a company with bad reviews even when they are unemployed.
Even if the company offered an increase in compensation by as much as 100 per cent, 30 per cent of job seekers would still reject the job offer.
Looking past short-term benefits
Given the current economic situation, it is no surprise that companies are struggling to adapt to changing workforce needs.
However, given the negative effects of laying off employees, companies should only resort to retrenchment should the situation be inevitable.
Aside from layoffs, there are many other alternatives these companies can take — and one of these could be retraining current employees to take on different roles.
For example, in 2013, American telecommunications holding company AT&T realised that half of its workforce were carrying out roles that would be redundant in a decade so it decided to retrain all of its 100,000 workers by 2020 instead of carrying out mass layoffs.
Besides retraining employees, cost cuts in other areas, such as cuts in benefits and perks, as well as furloughs, could be undertaken by companies to stay afloat.
Featured Image Credit: Compassionate Eye Foundation Martin Barraud via Ojo Images Ltd via Getty Images
Also Read: Grab to TikTok: Despite the rampant layoffs, these 7 tech firms in S’pore are still hiring
Hawker delivery platform bags RM4.6 million in funding round to help local MSMEs digitalise
WhyQ, a hawker food delivery startup active in Malaysia and Singapore, has secured an additional RM4.6 million (S$1.4 million) in an extension to their Series A2 funding round. The round was led by the Kairos FoodTech Fund of Kairos Capital Group, according to a January 26 press release.
The startup’s initial Series A2 round of RM11.8 million (S$3.6 million) closed in 2021, led by Delivery Hero, Chope, Angel Central, and RB Investments.
Established in 2017 as a hawker food delivery service, WhyQ will be using the funds to expand its digitalisation platform that helps build digital infrastructures for MSMEs.
“SMEs are the economic backbone of Southeast Asia, accounting for more than 90% of all companies and are the primary drivers of social mobility,” said Eric Cheong, the co-founder and managing partner of Kairos Capital Group.
However, these SMEs often struggle to find products that cater to their specific needs.
Thus, WhyQ’s role is to help those SMEs, which often face barriers to adopting newer technology. The startup currently supports over 20,000 small businesses in Singapore and Malaysia with its solutions.
According to the team, Malaysia now constitutes over 75% of WhyQ’s merchant base.
“Leveraging on our experience partnering with small-scale F&B owner-operators like hawkers, we would like to extend our expertise to now help small business owners in Malaysia to digitalise properly, with simple and free products,” said Varun Saraf, the CEO and co-founder of WhyQ.
The two free products include an eBiz app (WhyQ EBiz) and a digital bookkeeping app (WhyQ Kira Kira).
To cater the products to Malaysian users, WhyQ has localised the language and worked with strategic partners such as FoodPanda to create awareness and provide the best rates rates for its merchants.
Why WhyQ?
Based in Singapore, WhyQ has its start as a hawker-first digital ecosystem that provides a solid platform for hawkers to deliver cooked food, order wholesale raw-material supplies, and integrate with POS systems.
However, its delivery services have not yet made their way to Malaysia.
Its WhyQ eBiz app is a product that has been developed from their expertise with such services. A one-stop solution app, it enables MSMEs to create their own personalised e-store links, sharing them across their social media platforms and ultimately managing orders within the app.
Through the app, businesses can also connect with popular marketplaces like foodpanda, accept online payments, and connect with logistics services like Lalamove.
The digital bookkeeping app, Kira Kira, on the other hand, allows small businesses to track their daily transactions, manage their accounts, and apply for low-interest loans from partners such as Funding Societies.
Cue the growth
In 2023, WhyQ plans to add more features to its eBiz app, such as customisable templates for online storefronts and integrations with popular ecommerce platforms like Shopee and Lazada.
According to the press release, the startup also plans to partner with more logistics providers and payment gateways, giving small businesses more options for fulfilling orders and accepting payments.
Additionally, WhyQ also plans to enhance its digital bookkeeping app with features such as automatic sales and expense categorisations, inventory management, and bill payments. Meanwhile, it also aims to expand its network of lending partners.
“Everything we do at WhyQ, from product functionality to design—from physical or digital merchant acquisition to pricing—keeps SMEs at the forefront,” said WhyQ’s co-founders, Varun Saraf and Rishabh Singhvi.
“Our focus is on Malaysia for 2023, and our research suggests similar issues exist with small businesses in most countries in the region.”
Editor’s Update [09/03/23, 4PM]: Parts of this article have been edited to provide more information on the funding.
Also Read: For RM210/hr, international teachers can prep M’sian students for all major exams
Featured Image Credit: The team at WhyQ
Here are the M’sian chefs who proudly made the finals of Pastry World Cup 2023 in France
You’ve heard of the FIFA World Cup, but do you know that there’s also a Pastry World Cup?
That’s right. Every two years since 1989, pastry chefs from all over the world compete to be the grand champions of the Pastry World Cup (also known as Coupe du Monde de la Patisserie).
Malaysia has been actively competing in it since 2009, with our latest representatives competing in the finals on January 21, 2023.
A little background
The Pastry World Cup is an international event that gathers the crème de la crème in pastry making. Held in Lyon, France, the competition tests the capabilities of chefs in various aspects—mainly their abilities in product sourcing, natural tastes, and precise gestures (techniques).
Similar to the football championships, the Pastry World Cup is also a team sport. Each country’s representative boasts a team of four chefs with different specialties. There’s the team captain, the ice cream specialist, the sugar expert, and the chocolate maker.
Together, they join forces to take on the different challenges in their respective fields. The goal? To produce visionary desserts that create a pastry revolution worldwide.
Contestants are selected in different stages, first nationals then continentals, before the final competition in Lyon.
Once national representatives are chosen, there are four continental selection events in Africa, Asia, Latin America, and Europe respectively. A win in these continental rounds serves as a ticket to France where top pastry chefs from over eight countries will be gathered.
During the grand finale, qualified teams are given two days to create confectionary masterpieces. They’ll work tirelessly to make a variety of desserts in the short ten hours given, which will be judged by a panel of experienced chefs.
The winners will walk away with a trophy, gold medals, cash prizes, and bragging rights.
Our contestants are…
This year, four talents represented Malaysia to compete in the Pastry World Cup 2023—Yap Kean Chuan (team coach), Mun Pui Teng (team captain and sugar expert), Charles Lim (chocolate expert), and the youngest member Goh Jun Wei (ice carving expert).
Each of the team members has separate day jobs, with Yap as an executive pastry chef at FrieslandCampina Professional, Teng and Lim as pastry chefs at the Academy of Pastry Arts Malaysia, and Goh as a pastry chef at Voila Patisserie.
With the guidance of Yap and his over 15 years of experience, the pastry chefs managed to win first place at the Asian Pastry Cup in Singapore last year. It was here that the Malaysian team was also awarded the well-deserved special prize for the Best Taste with their chocolate cake.
However, their busy schedules meant that training and trial runs for the competition could only be done after they were off the clock. The delay of the Asian Pastry Cup also meant there was lesser time to plan and prepare the menu for the grand finale in France.
“In a week, we had three rounds of trial runs, simulating the competition, which lasted 10 hours each time,” the team shared.
Qualifying teams are usually given six months to prep in advance, but contestants were only given two months this round. There are 17 confections to create from scratch and each serves as a demonstration of new techniques and interpretations of this year’s “climate change” theme.
“Naturally, we were slightly nervous knowing we had big shoes to fill, but we were mostly excited and proud to represent Malaysia at the international stage,” the team said. “It’s a definite confidence booster for us as we headed to the Pastry World Cup with the experience and wisdom from our predecessors.”
From the sounds of it, they were probably in touch with the Malaysian winners of the Pastry World Cup in 2019, which was our nation’s first win.
This comes as no surprise as Yap has mentioned his previous experience assisting them, and the pastry shop that Goh works at was started by two of the team members, Chef Otto Tay and Chef Loi Ming Ai.
It seemed as though our Malaysian 2023 team was all set and ready to head off to the finale, but they actually almost didn’t make it.
A hero swoops in
We found out that the team was having difficulties looking for sponsors before the finals in France. Yap explained that the World Pastry Cup was still an obscure event to many Malaysians as promotions of it locally are scarce.
“I have had to use money out of my own pocket,” he said. Luckily for them, Debic came to the rescue. A proud sponsor of the Pastry World Cup for the past 20 years, the professional dairy brand made for food service professionals launched in Malaysia just last year.
As a show of commitment to their support of talented and passionate food professionals, Debic decided to lend a hand.
“With Team Malaysia’s chefs winning the Asian Pastry Cup and qualifying for the Grand Finale, Debic is honoured to be able to sponsor the talented team who has their sights on bringing home another championship title for Malaysia,” said Ms. Ramjeet Kaur, the managing director of Dutch Lady Milk Industries Berhad (subsidiary brand of Debic).
Be prepared for anything
The pressure of any competition can get quite daunting, but it helps to have the right attitude and mindset when walking in.
Speaking candidly, the team had expressed both their proud and humble expectations for the championship.
“We’re sure everyone feels this way, but our main goal is just to do our best at the competition, not only for ourselves but for the country too,” the team shared with Vulcan Post prior to the finale.
“Getting here was no easy feat, and we would definitely like to keep the good record of the past Malaysian pastry teams, but we hope to perform our personal best at the Pastry World Cup this year.”
Unfortunately, despite their best efforts, the team was beaten by Japan and five other countries for the top spot. Landing in sixth place, they may have not brought home any medals, but instead brought home more experiences and passion for the creation of innovative pastries.
“The Pastry World Cup is an extremely rigorous competition that tests not only our skills and creativity, but our physical and mental strength,” the team noted.
“But no matter the result of the competition, we’ll come out of this setting higher standards for ourselves, continue to learn and grow, and create more creative and delicious pastries every day,” they assured.
- Learn more about the Pastry World Cup here.
Also Read: Hopping into a festive Peranakan house, what does a DJ rabbit have to say about CNY?
Featured Image Credit: (from left to right) Otto Tay (Pastry World Cup 2019 champion and Debic Ambassador), Charles Lim (chocolate candidate), Yap Kean Chuan (team coach), Ramjeet Kaur Virik, (Managing Director of Dutch Lady Milk Industries Berhad), Majid Zaman (Sales Director at Horeca & Bakery APAC and FrieslandCampina Professional), Mun Pui Teng (team captain and sugar candidate), Goh Jun Wei (ice candidate), and Loi Ming Ai (Pastry World Cup 2019 champion and Debic ambassador) at the send-off event for team Malaysia 2023 by Debic.
LinkedIn lists 15 fastest-growing roles in S’pore as 2 in 3 locals seek a new job in 2023
Leveraging its access to close to 900 million users spanning 200 countries, LinkedIn is annually publishing a summary of “Jobs on the Rise” in selected markets — i.e. positions which have been growing in popularity in the span of the previous five years and continued the trend into the most recent year of the report.
Here’s the methodology explainer:
LinkedIn Economic Graph researchers examined millions of jobs started by LinkedIn members from 1 January 2018 to 31 July 2022 to calculate a growth rate for each job title.
To be ranked, a job title needs to see consistent growth across our membership base, as well as have grown to a meaningful size by 2022.
Identical job titles across different seniority levels were grouped and ranked together. Internships, volunteer positions, interim roles and student roles were excluded, and jobs where hiring was dominated by a small handful of companies in each country were also excluded.
In-demand skills
Majority of this year’s Top 15 list fall into two segments, giving us some idea of what skills are in demand in 2023:
1. Sales and customer relations
Highlighted roles:
- Sales/Business Development Representative
- Enterprise Account Executive
- Customer Success Specialist
- Technical Account Manager — which takes us to the next segment:
2. Technology
- Cloud Engineer
- Cybersecurity Engineer
- Site Reliability Engineer
- Machine Learning Engineer
- Artificial Intelligence Engineer
- DevOps Engineer
- Back-End Developer
- Cybersecurity Consultant
In addition, there are individual professions representing other industries/areas:
- Finance: Investment Associate
- Healthcare: Healthcare Assistant
- Corporate: Product Owner/Manager
In summary, there are two sets of skills that can land you a good job: either you know how to sell or otherwise make more money for the company, or you possess valuable technical skills — i.e. know how to do certain things.
Self-improvement on the rise
54 per cent of Singaporeans polled as a part of this survey have confirmed they took additional effort to improve their skills and seek education in areas that are currently in-demand.
It’s certainly good news for the Singaporean economy, but not so good for other ambitious jobseekers, as it means tougher competition for better paid positions, given how many people are taking steps to make themselves more attractive.
In fact, 65 per cent of local professionals are considering looking for a new job in 2023, driven mostly by inflation pushing living costs up, seeking a higher pay (especially given recent reports that the best way to secure a 15 to 20 per cent (or higher) boost to your salary is to change your job).
At the same time, however, there’s some good news for employers, as 58 per cent of their staff would happily stay at their current workplace if given a boost to their income, meaning that it’s not dissatisfaction with career prospects that’s driving people to look for a switch, but purely financial matters.
Though negotiating with them may be more difficult than ever, as the survey’s highest percentage on record — 46 per cent this year — are feeling more confident pushing for a raise or promotion this year (though we’ll see how that pans out in practice, of course).
Better than elsewhere
It’s still very much employee’s market in Singapore, as the recent report by Manpower Group placed it among the Top 3 countries starved for talent, as 84 per cent of local employers report problems hiring the right people.
With unemployment very much back to pre-pandemic levels even the likely economic slowdown, which has long been forecast for 2023, is unlikely to pinch regular Singaporeans painfully simply because local businesses still have ranks that need to be filled.
And while giants like Google, Twitter or Amazon might be shedding jobs, smaller companies will happily bring the talent on board to propel their growth.
As long as you have valuable skills, which can meaningfully contribute to the bottom line, not only do you have no reason to fear for your job, but you should shop around to find yourself the highest bidder, before someone else does.
Featured Image Credit: Depositphotos
Also Read: How to increase your income in Singapore by 20% or more in 2023
