By Clint Bailey – ‘The Voice of EU’
Raza H. Qadri (Ali), a Business Transformation expert and the Founder of Vibertron Technologies, a BizTech company, possesses extensive experience in the tech industry. Throughout his career, he has provided consulting services to both large corporations and SMEs undergoing significant restructuring initiatives.
In a recent interview with Voice of EU, Qadri highlighted the detrimental impact of mass layoffs on mid-career tech professionals and the businesses that implement such measures. He expressed his concern regarding the prevailing trend of widespread workforce reductions, suggesting that it represents a logical misstep.
“Considering the reputation of the tech industry for innovation, I had anticipated greater progress in recent developments. However, it appears that tech companies are regressing, particularly in their dismantling of established departments and structures that were intended to drive future growth.”
[Mass redundancies are] an outdated and traditional practice that most companies turn to as a first resort to create liquidity
Qadri says that most of the employees impacted by layoffs have “approximately 10-11 years of experience” and so are “not really junior staff that are easily replaced,” noting there would be “a loss of skills and knowledge in these companies.”
Additionally, he expresses concern regarding the potential loss of diversity at the technical and software engineering layer. Executives are increasingly focused on building and developing technology utilizing AI systems, which are known to possess biases due to limited training data.
Throughout his extensive experience working across various industries and regions, Qadri has observed that more than 70% of digital transformation initiatives either fall short or fail to achieve their intended outcomes. He emphasizes that one critical component, often overlooked, that can make or break digital transformation is the “people element.”
Emulating Technology & The Copycat Phenomenon
“In my view, the companies seem to be copying each other’s operations strategies” says Qadri. According to Qadri, these companies view the situation as an opportunity to streamline their workforce by letting go of the additional employees they had hired during the pandemic-induced surge. Many believed that the future would be dominated by virtual meetings and peripheral manufacturers would continue to experience significant profits.
However, in contrast to the significant revenue growth experienced by many companies during the global lockdowns, a notable trend has emerged. Numerous organizations have initiated large-scale job cuts.
According to data compiled by Layoffs.fyi, 693 technology businesses have already laid off 197,945 employees this year, with the year not even reaching its midpoint. This figure surpasses the 164,591 individuals laid off by 1,056 companies throughout the entirety of 2022.
Qadri quoted Henry Ford’s aphorism – “Thinking is the hardest work there is, which is probably the reason so few engage in it” – saying that mass redundancies were “an outdated and traditional practice that most companies turn to as a first resort to create liquidity.”
Shareholders, Profitability & Financial Performance Driving the Bottom Line
Qadri said: “The impact of layoffs on profitability may not be immediately evident, as increased expenses and significant severance packages (usually spanning 3-6 months) need to be accounted for in the short term. However, the dismantling of established departments and structures by tech companies is perceived as a regressive step. This approach reflects short-term thinking, lacking a focus on sustainable strategies for the digital future.”
Business Transformation Exec. Raza Qadri Talks About Mass Layoffs.
Qadri, who recently introduced a new remote work tech transformation algorithm MCiHT™ (Multi-Channel Integrated Hybrid Technologies) for Vibertron Consulting Solutions, notes that while companies are laying off people, they are investing billions in AI, IoT, and automation, citing the billions Microsoft has put into OpenAI so far.
In recent months, Microsoft announced its intention to reduce its workforce by 10,000 employees, which constitutes approximately 4% of the company’s total staff. This decision was prompted by Satya Nadella’s remarks highlighting the necessity for productivity enhancements. Microsoft is not the only company taking such measures; other prominent organizations like Salesforce, Amazon, Google, Meta, and several others are also trimming their workforce to align with the excess hiring made during the growth spurred by the COVID-19 lockdowns.
On the company’s most recent earnings call last month, Nadella noted: “During the pandemic, it was all about new workloads and scaling workloads. But pre-pandemic, there was a balance between optimizations and new workloads. So what we’re seeing now is the new workloads start in addition to highly intense optimization drive that we have.”
CFO Amy Hood then quickly responded to this, stating the company had “been through almost a year where that pivot that Satya talked about, from [here] we’re starting tons of new workloads, and we’ll call that the pandemic time, to this transition post, and we’re coming to really the anniversary of that starting. And so to talk to your point, we’re continuing to set optimization. But at some point, workloads just can’t be optimized much further.”
Not singling Microsoft out specifically, but speaking to the point of moves made by tech companies in a ‘maturity phase’. Qadri said, “Layoffs significantly impact this key performance indicator (KPI), despite the fact that these companies may possess substantial reserves. Such measures serve as a swift means to align with investor expectations and share prices, enabling them to quickly optimize their size and structure.”
Is It A Sustainable Approach?
During our conversation, we inquired with Qadri about the notable and unprecedented cuts that occurred at Twitter following Elon Musk’s involvement with the company.
He said: “I find it difficult to believe that only 30 percent of the organization was responsible for managing the entire structure. Even if that were the case, it would require considerable time to evaluate the existing structure, realign roles and responsibilities, and implement transformative measures to enhance efficiency.
The sudden loss of a significant portion of the workforce within a few weeks raises concerns, and I anticipate witnessing a restructuring of the top leadership with the arrival of the new CEO. Considering the online statements made by individuals like him, I am apprehensive about the values and direction that tech leaders of this nature promote.”
“Conversely, individuals whose skills are no longer retained by the tech industry now have opportunities to pursue financial independence and may choose not to revert to traditional roles within companies. Some are exploring avenues as independent contractors, leveraging their technical expertise to manage multiple full-time jobs enabled by remote work.”
Ultimately, the tech industry is “not really in a dire situation financially,” he says. While it “might have some loss of revenue [it is] not in the red yet. Layoffs should be last resort in truly bad financial situations, rather than first resort in slightly uncertain conditions.”
According to Qadri, one of the proposed solutions is for companies to resist the urge to follow the crowd and instead prioritize addressing the people element. By gaining support from investors and other stakeholders, companies can shift their focus towards long-term objectives rather than short-term gains. This entails establishing a robust ecosystem of internal and external stakeholders.
Photo credits: Vibertron.
Clint Bailey — Senior Business & Technology News Editor at ‘The Voice of EU’ & Co-Editor of EU-20 magazine.
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