Big Tech layoffs – a meltdown or course correction? Harvard Prof Ranjay Gulati explains

When we say Big Tech is laying off, it is not that they are laying off only engineers. Most of these companies ramped up around service functions, support functions and other activities around scaling. They may have gone a little too far and I think this is a course correction happening around them. These jobs, even the engineering jobs are going to small tech. So it is not like people are out of jobs,” says Ranjay Gulati, Professor at Harvard Business School & Advisor to global corporations.

Twitter, Apple, Meta, the tech giants, have all fired thousands of employees. As of October this year, Silicon Valley has seen around 45,000 layoffs. Is this the worst effect of the global economic slowdown just yet? Will that impact the Indian tech industry going ahead?

The first problem Big Tech has is that they have got problems associated with being too big. Even Instagram and YouTube have been taken to the cleaners by TikTok. They have been unable to innovate their way out of this. Facebook or Meta is a classic poster child of this. First they have a bigness problem which is in a fast moving dynamic environment, they just are not able to keep up with what is happening around them. So there is a cautionary note over there.

Add to that the slowdown that is looming behind them and the fact that they have ramped up too quickly. We saw ramping up happening during Covid but people also misunderstand a couple of things. When we say Big Tech is laying off, it is not that they are laying off only engineers. Most of these companies ramped up around service functions, support functions and other activities around scaling. They may have gone a little too far and I think this is a course correction happening around them.

These jobs, even the engineering jobs are going to small tech. So it is not like people are out of jobs. There has been a bit of a reshuffling from Big Tech to small tech, right sizing of support functions. so there is a lot more to the story than just laying off 15,000 engineers who have nothing to do now. It is a more complicated story but no question that for those wondering if we will have a recession ahead, this could be a bellwether to what lies ahead.

One takeaway is the solid impact that the pandemic has left in its wake on the global economy. It has changed a lot of our work lives and within that, work culture has changed, work from home is a big reality; silent quitting is rising, relationships between employers and employees are seeing a tectonic shift. Could this lead to a completely different work scenario?
People have talked about the great resignation or the great reshuffle, I think it is more like a great rethink. No question Covid was a reset moment for a lot of us. And if we think that is all forgotten and all back to square one, again I think one is being naïve about that. I think people are re-examining how they want to live their lives and they are looking for understanding about how to bring more coherence into their lives, how if they are going to work and what they do in their lives.

Think about the phrase work life balance. What a horrible phrase. It implies work is not life. One can have work leisure balance. You can have work family balance but work life balance implies that work is not living and I think that is a problem. People want to feel they are living at work also and whether that means working from home, having a bit more flex and even the kind of work I choose to do, in a tight labour market where people will have choices, this was what we have seen over the last two years. People either check out or look for something that really adds more meaning and fulfilment to what they are doing.

You have been advising a lot of global organisations. From an employers’ perspective, how do you see them getting the best of their employees in this challenging environment?
The chief human resources officer of Microsoft, Kathleen Hogan, likes to say that you do not really work for Microsoft until Microsoft works for you. Now what does that really mean? It means that Microsoft is not going to help you achieve your life purpose but Microsoft is going to help you understand how you can have a more fulfilling work and to make work and life more integrated for you. I think companies today are more tuned to this idea that I want to work in an organisation that resonates with who I am, my values, my own purpose and if it does not, I do not feel I want to be there.

So there is this tectonic shift as I see it and in that sense employees themselves have to go and find themselves a deeper purpose. How do they do that? How do you see employees pursue their dreams and ideals working within organisations as that is going through a shift too.
Yes, so let me tell you. There was a study done by a professor at Yale and Michigan where they looked at how people think about work. They had three possible ideas, primary reasons we all go to work. The first reason we go to work is my work is a job, I go to make money. The second was my work is a career, I do it to get ahead, advance and the third was my work is a calling, I do it because it gives me real meaning and pleasure and purpose. Now I still want to make money but what is the primary of the three orientations.

They looked in a hospital to see what doctors have to say. It was one-third, one-third, one-third for the doctors and that is not surprising. They went to interview those doctors who said my work is my calling. They said they want to help people, make a difference and that really means something to them. They are excited to come to work and these people had low absenteeism, high customer satisfaction, they were loyal and stayed long in the jobs and were much more productive and felt more fulfilled.

Now this was happening spontaneously in hospitals and the question we have to ask is if they can do it, why cannot all of us and why cannot organisations and leaders create a climate where people feel that they come to work in a way where they feel it is not just a job? We have to re-imagine this kind of transactional job-like environment to create a more meaningful fulfilling work place. Organisations have to understand that when workers are inspired, they are more than twice as productive as when they are satisfied.

Meanwhile, one wonders whether different organisations in different parts of the world are approaching what you are talking about in terms of employer-employee relations. Morgan Stanley says that India is going to become the third largest economy in the world by 2027 and is being offered as a beacon of hope against the kind of downtrends we are seeing elsewhere in the world. Do you think India has what it takes to align with the Morgan Stanley vision?

There are several things that go into unlocking opportunity in a sector. Of course, a larger geopolitics is being played out with a China counterpoint and trying to understand where else can they go. We always point to the youth dividend in India with its young, educated, English speaking population.

But we have to understand that we need several things. We need the right kind of talent pool and the right kind of talent pool requires universities and educational systems to drive it. We need to have jobs for that talent pool. Do we have the organisations that are willing to invest in that talent to grow that talent, right, we have to have that in place. We have to have the capital structure that takes risk capital that is willing to invest in opportunities for growth and then we need to have the government infrastructure that supports all these agendas.

There are several parts of it and all have to be in sync working together. Each of these parts is moving at different speeds and we have to understand are we developing, grooming the right kind of talent at the right kind of speed, do we have the jobs to absorb that talent, do we have the infrastructure to create work environment for that talent and do we have the capital structure to really invest in the businesses that grow that talent and I feel that they are little bit off sync right now and now and if we are going to really achieve that fullest potential that India has to offer I think they have to work together and that is the hard part right now. Sometimes it means getting everyone on the same table sitting down and talking about it like what is our strategy for growing in certain pockets of sectors.

In terms of the kind of shifts that we need to make, do you see them happening in government policies in India that could further lend the kind of credibility that India needs to offer stable growth for business in general, especially equity markets?

I think there is a recognition at least from the government too that this is an issue we need to tackle and this is our moment and the question is do we have the wherewithal, the stomach to really make those decisions and to really follow through on those decisions or those promises that we will deliver on that? That is where this is going to play out but we are uniquely poised to seize the moment and this can be a real inflection moment for tremendous growth or it can be really another missed opportunity.

Source: GWFM News