Massive layoffs: What is going on with the Market? 
Employee Training
Byadmin-hubtek |
2 December, 2022 |

The market in general is going through complicated situations like uncertainty, an economic recession, inflation, etc. Many companies are experiencing internal issues that are forcing them to have massive layoffs.

The website Digiday states that, “Economic headwinds are gathering and casting a specter over the balance sheets of companies across the industry. In such a climate, terms such as layoffs, restructuring, or “reduction in force” are (tragically) all too common.”

We spoke with experts in our company, and this is what they had to say about Masive layoffs: 

Alejandro Muñoz, Growthmaster at Hubtek, said that 2022 has presented several challenges, one after another. These post-pandemic scenarios have caused every company to re-evaluate their strategies, budgets, and objectives. Tough times come with tough decisions that need to be made. He continues by saying that one of the first assets to evaluate when it comes to being more cost-effective is the people. Our industry hasn´t escaped this threat. We have faced this challenge with our customers who have decided to reduce costs by parting ways with several employees. 

In these tough circumstances, our procedures must be reviewed in detail, so we can identify the bottlenecks that must be addressed and minimize the number of layoffs. It is a challenge to find the right balance between being productive and cost-effective, and keeping the right talent, because when the peak season arrives, the lack of well-skilled people could be the new challenge to face. “As we know, our industry is full of ups and downs.  So, we must be ready to face those challenges by getting the right talent at the right time, and keeping an eye on those partners that are bringing value to our companies, because the experts say that 2023 could be even more demanding than 2022.” 

To conclude, he believes that prior to making the tricky choice of letting people go due to economic circumstances, it is vital to examine in detail if it’s worth letting them go. “Let´s consider the time we’ve invested in training, the learned experience of those folks, and all the other valuable qualities that could be more difficult to find in a new person when the situation changes again”. 

Our People Experience Director, Valentina Villa, said that many companies in the industry have gone ahead and cut staff due to low labor demand and the uncertainty of what 2023 will be like.  As the word on the street is spreading, the economic recession has investors, and both public and private companies very concerned about what next year will bring.  However, these massive layoffs are also part of the post-pandemic reset. The next few quarters will certainly have American businesses struggling. The startup scene will take the most severe hit, but the economy is likely to recover. 

“From an HR standpoint, we always try to take care of the employees and be as empathetic as possible to the people who have dedicated so much time to the company.  Before deciding on a massive layoff, we should always ask ourselves if we will need this person again in the future. The answer will surely be ‘yes’, and that is why before letting a person go, we should consider alternatives to our decision, such as where else they could add value, based on their professional profile, what other department could they possibly work in, etc.” 

She concluded by saying that massive layoffs should not happen so often.  So, for this to not happen, a study of the positions and the needs of the company, in terms of recruitment, should be done, because companies usually hire a lot of staff when there is a very high demand for seasonal work, but after the tide goes out these people don’t even have a workload of 70%.  So much talent is lost, when perhaps they could be relocated to another area where they can contribute value.  Companies should be more strategic about this.   

Finally, Juan Vanegas, Sales Team Leader at Hubtek, expressed that the market reported weaker-than-expected third-quarter results and strongly hinted at impending labor cost reductions to combat the impact of slowing demand and increased costs. Some companies got ahead of themselves in terms of headcount, and many logistics companies did not forecast truckload demand declining as rapidly as it did, or spot market and contract rates deflating considerably.  

He also specifies that changes in the market, coupled with many successful endeavors on the digital roadmap directed at scaling operations to be more efficient, has allowed companies to reduce their overall cost structure in several areas.  By implementing a combination of methodologies such as technology automation tools that support existing associates with time-consuming tasks, you allow them to focus on more revenue-generating activities. Furthermore, options such as outsourcing some roles is always an avenue for those companies who are looking for ways to reduce costs. 

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