Office hammocks, sleeping capsules, catered lunches, offsite meetings, fun-filled ‘idea stations’ – the tech industry learned the language of persuasion. ‘We’re not like the others,’ they’d say, and they’d promise a new world of people-centered policies and innovative environments. And for a while, it worked. We were mesmerized. Such comforts are something never dreamt of in academic and non-profit environments, where all of us zealously seek grants and extort every dollar.
But the dream was just that – a dream. Now, the tech sector is jolting us awake with a harsh dose of reality: Large scale dismissals. As we have seen in India and USA, tech firms are doing large-scale layoffs of their employees.
The very companies that boasted about valuing their employees now seem to have a warped understanding of what truly matters. What's driving this cycle of aggressive hiring and ruthless layoffs? The wrapped incentives of a tech company and culture seem to be related to the large layoffs that happen.
While economic downturns and company restructuring are often given as reasons for layoffs, the tech industry's behavior is unique. Internal incentives often prioritize rapid team expansion. Former employees of big names such as Amazon have disclosed that career advancement, in these firms, is dependent on the number of people you can manage. It appears that career progression becomes entangled in the number of direct reports one has. Simply having a large team, no matter how unnecessary, is seen as an indicator of effective leadership capacity. This creates a strange incentive for recruiting massively even if this results in inflated teams and wasteful resource allocation. These bloated teams become unwanted when market conditions change. Then the story conveniently changes to mass layoffs seen as necessary “course correction” from former excesses. It's a cycle we've seen repeat itself, leaving a trail of disillusioned and financially vulnerable workers in its wake.
This is complicated further by literature (Meuse et al., 1994) suggesting that mass layoffs may not be in the company's best interests. Studies show that company morale, productivity, and stock performance can all suffer as a result of mass layoffs in the long term. What’s more, there is evidence of social contagion effect such that other tech firms seem to mimic the layoff behavior of industry leaders leading to domino effect that worsens the situation for workers and the economy at large.
Is this simply a case of a "compensatory gap"? Were we so distracted by the shiny perks that we failed to see the lack of genuine security? These layoffs have ripple effects far beyond the individual. They destabilize families and inject fear and uncertainty into the broader job market. Research also shows that "Temporary layoffs that turn into permanent job loss are an important contributor to overall unemployment".
Maybe it’s time to question metrics for success in tech. Instead of giving priority to fast growth and surface level benefits, companies should adopt practices that are sustainable while prioritizing workers’ genuine welfare and long term stability. No one wins in this current cycle.
Round Ups:
52/53 Indian apps studied exhibited at least 1 Deceptive Pattern
A new study titled “Conscious Patterns” from ASCI Academy in collaboration with Parallel examines the use of misleading design in the most popular Indian applications. The study conducted here shows that 53 apps in 9 industries with 12,015 screens, have 98% apps displaying at least one deceitful pattern, the most common of which are privacy deceptions. The reported lists 12 pervasive design patterns that are misleading and their consequences; however, the importance of ethical design is emphasized.
It also presents the “Conscious Patterns” web-site as the one which focuses on ethical usage of digital products and protection of the consumer’s rights within the context of India’s continuously developing digital environment. Read the report here.
Wealth Reduces Compassion
As the level of income rises, people become less sympathetic and less compassionate toward others, according to a recent study. Berkeley psychologists Paul Piff and Dacher Keltner discovered that the unethical behaviour including sudden turning in front of other drivers or monopolizing resources were more often practiced by people with higher levels of ‘wealth’. This could be due to the fact that having wealth leads to self-sufficiency in most areas, and this might lead to selfishness. Moreover, the richer individuals may justify greed as reasonable, which will reduce their empathy even lower. In light of these trends, these results have important implications for how the elite may interact with the less privileged as income disparities widen. This idea is echoed in the movie Fight Club when Tyler Durden states, “The things you own, own you.” It may be that wealth is costly to our humanity than we care to acknowledge. Read more about the paper here.
Delhi's Rise in the Startup Scene
Until recently, Bengaluru was the preferred city for technology-based start-ups, with a favourable ecosystem to connect with the talent pool, venture capitalist investors and innovation. However, this narrative is changing. While Bengaluru continues to believe that its startups are doing promising work, it is the Delhi-based ones that are thriving as enterprises. Companies such as Paytm, Zomato, Delhivery among others are already listed in the stock exchanges and this aspect underlines Delhi’s advantage. Delhi is more strategic in constructing sustainable ventures, while Bengaluru might be already content with its growth. Still, Prashant Singh differs and states that success is not limited to location or the city only. There are however indications that with available resources in the startup scene tightening, the battle between these two cities is now on and Delhi might be getting the better of Bengaluru. listen to the ken podcast here
