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tech sector layoffs: to avoid going viral for the wrong reasons, tech companies turn to outplacement

tech sector layoffs: to avoid going viral for the wrong reasons, tech companies turn to outplacement

when layoffs happen: managing risks, benefits, ROI and your bottom line

As seismic market shifts and a change in VC sentiment lead to layoffs in the tech sector, HR leaders are grappling with how to best support their employees - and their businesses - during the disruption. For some organizations, this means reducing workforces to prolong their runways. According to, nearly 700 startups have laid off more than 90,000 employees to date in 2022. Even companies like Meta are quietly reducing staff to cut costs.

Yet the massive tech layoffs are not surprising. When the pandemic dramatically transformed the global labor market, it also led to a surge in product demand – and hiring – in the tech sector. Today we are looking at a new landscape. Soaring inflation and geopolitical turmoil have drastically reduced consumer spending, forcing many tech companies to right-size and shed excess jobs. 

Now, market volatility is leading to a surge in demand for outplacement services as organizations strive to ensure that they, and their employees, are suitably prepared for potential – or imminent – business transformation.  

Learn more about tech trends and right-sizing in the post-pandemic economy.


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    how layoffs can lead to backlash

    Unfortunately, due to financial pressures and swift decisions, some recent layoffs have been handled with disjointed communication and a lack of support. The resulting backlash has been significant, with negative media coverage and disparaging social media posts on sites such as LinkedIn and Glassdoor. Ultimately, this has made a bad situation worse, damaging the reputations of the organizations involved and causing long-term ramifications yet to be seen. 

    If there’s a silver lining to these mishaps, they highlight the serious consequences you face and the significant power you have in shaping your brand image when layoffs occur.

    evaluate your risk

    If you’re thinking about layoffs – or have an immediate need to begin the process – it’s critical to evaluate your risks as you explore outplacement solutions. The first step is to recognize that layoffs shape your brand in ways that extend far beyond the immediate events. In the broadest sense, your reputation is at stake. 

    From planning through implementation, the decisions you make throughout the process have lasting repercussions: Layoffs are newsworthy and may result in media coverage that can tarnish your brand. There’s also costly litigation to consider. Additionally, remaining workers will feel the effects, leading to possible declines in corporate culture, morale, productivity and retention. Your consumer brand – and revenue results – may suffer too. 

    By providing expert services and solutions, outplacement helps you mitigate risks that impact nearly all aspects of your business success while providing your employees with the empathy and care they deserve throughout the transition. 

    how outplacement eases the transition

    When you’re faced with layoffs, outplacement provides a suite of services to streamline and smooth the transition. Through fast, scalable and cost-effective solutions, outplacement helps departing employees find their next job through personalized career coaching, resume writing and job-searching services. It also meets broader organizational needs in planning, leadership training, worklife coaching, legal compliance and more. 

    Five ways to optimize right-sizing with outplacement

    From start to finish, outplacement services help you navigate right-sizing so that your entire organization can move forward with greater confidence and well-being. 

    1. explore innovative alternatives 

    While layoffs are a common technique used by startups to extend their financing runways - and larger firms to prepare for marketplace changes - they must be approached with care. Outplacement providers can help you evaluate workable alternatives to ensure you are making the best strategic choices before initiating layoffs.

    When exploring cost-cutting measures, organizations can consider numerous alternatives, including voluntary layoffs (required in some countries), temporary layoffs, hiring freezes, internal mobility and redeployment, which will allow you to contain costs and maximize your existing workforce. By taking the time to evaluate your options, viable alternatives may support your long-term business and financial goals. It’s wise to weigh all your options. 

    2. protect your employer brand 

    When layoffs are unavoidable, they’re more than a business decision. Layoffs are a people decision that profoundly impacts your greatest asset – your talent. Too often tech companies prioritize business viability over the needs and feelings of the individuals affected by layoffs. It is good practice to recognize individual needs during a round of layoffs, even if the overall decision is made with a rational, pragmatic mindset. 

    The way you treat people during layoffs speaks volumes about your brand values and your employer brand. Your employer brand is your reputation. It represents your employee experience before, during and after their tenure with you – and its ripple effect extends to families, communities and the broader public. Having a positive employer brand is more important than ever in the talent-scarce labor market.

    During layoffs, your actions shape your employer brand. Are you a compassionate leader? Do you provide a support system? The way you guide and support your employees during layoffs will mean the world to them. Companies that value their employees know it’s vital to take care of them at every stage of the talent life cycle, including at departure.

    3. empower your workforce

    Outplacement provides people and technology resources to facilitate career coaching, resume writing, job-searching and skilling to help impacted employees land new positions of equal or better pay. The goal is to help exiting employees find best-fit opportunities with speed, efficiency and confidence. 

    Outplacement also prepares organizations by providing notification training to ensure management delivers clear, consistent communication. Remaining employees, too, can benefit from coaching and resiliency programs as they cope with changing work dynamics, which help improve engagement and retention moving forward. 

    4. safeguard future recruitment and retention

    Despite market fluctuations, the war to attract – and keep – top tech talent will remain strong. Tech workers are a highly mobile talent sector with broad cross-industry capabilities; their career choices will continue to be robust. 

    By positioning you as an employer that cares about its talent, outplacement is an extremely valuable resource for HR leaders in the tech sector who want to remain a top talent destination – and rehire ‘boomerang’ employees – when the market recovers.   

    5. maximize ROI – and bottom-line results

    The tech sector is entering a period of uncertainty that will demand tough choices to ensure survival, growth and sustainability. As you evaluate outplacement costs, it’s critical to consider ROI and the high cost of not funding outplacement services. By analyzing the potential for increased attrition, lower productivity, lost revenue and costly litigation, it’s easy to see that the benefits of outplacement can significantly impact your bottom line.

    Additionally, when turnover costs range from 33% to 200% of a departing employee’s salary, your action with outplacement can lead to substantial savings in recruitment and retention alone.

    moving your business forwards

    As you navigate relentless market dynamics, outplacement can have positive, long-lasting effects on your future business success - and support all the hard work you’ve put into creating a positive workplace culture. Among its many benefits, it safeguards your employer brand and helps you attract the best talent - critical assets that will enable you to maintain your competitive edge moving forward. 

    Download the guide now to find everything you need to know about choosing the best outplacement firm for your needs.