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Recent layoffs in large tech companies such as Microsoft Corp MSFT, Amazon.com, Inc AMZN, Alphabet Inc GOOGL and others can have widespread implications, both within the tech industry and beyond.
In a piece for Insider that was published on Friday, Brandon Southern, the former head of analytics at eBay Inc EBAY, Amazon and GameStop Corp GME shared his thoughts as to why such layoffs occur at such big companies.
“At most companies, the reason for layoffs is almost always the same: trimming expenses to achieve better margins. But many of those expenses shouldn’t have existed,” he wrote.
According to Southern, managers are responsible for layoffs because they bloat a company when seeking promotions.
“Managers rarely inherit additional teams or team members. Instead, the only way that managers can demonstrate their ability to lead a larger team is to hire more people. By hiring more team members, the manager’s scope would naturally increase, increasing the odds of being promoted,” he explained.
Southern also wrote that a manager’s cost-saving efforts don’t impact one team in isolation.
“A standstill on budget or headcount reflects on the manager and the manager’s manager — all the way to the top,” he noted.
“Even if a leader says they want more efficiency, they really want a bigger scope and promotion to help them move up as well. And efficient teams aren’t helping them get there,” Southern added.
“Given human nature and the constant desire to build something bigger, I doubt that there is any real concern with managers trying to make their organizations as small as possible,” he concluded.
Photo: Shutterstock
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