Are mid-management roles the next target in tech layoffs? Here's what experts have to say

Layoffs have been the talk of the town for the job market since mid 2022. From big firms to startups many companies have laid off employees, announced hiring freezes and pay cuts.The trend has been really tough on employees at all positions. Now, even the big companies have given some indication that the layoffs round this year can hit mid-managerial positions.Earlier this month FedEx announced that it will give pink slips to more than 10 percent of its directors and officers to cut costs. Facebook’s parent company Meta’s CEO Mark Zuckerberg also hinted on cutting mid managerial roles.In Meta's fourth quarter earnings announcement, Zuckerberg called 2023 the 'year of efficiency,' and said that the management is focused on becoming a stronger and more nimble organisation.Hinting towards more job cuts, Zuckerberg in the earnings call said; “We may incur additional restructuring charges as we progress further in our efficiency efforts."Further in the earnings call he added that Meta Platforms will cut some layers of middle management amid a companywide effort to reduce costs and increase “efficiency.”Meanwhile Google, Intel, Zoom and Apple have announced pay cuts for senior roles.Should mid-managers be worried?The trends and expert analysis does show some indication that mid managerial positions can be the next addition to the layoffs coming in 2023.The experts say that as companies are on cost cutting measures after facing losses in the past quarters cutting down mid managerial roles can be a possibility.“There has been a clear pressure on margins due to high inflation. We have seen Q2 and Q3 results in India where revenues have been in line with market expectations but margins have been lower than expectations. As companies finalise their FY 24 plans , every cost item is under scrutiny and wherever any kind of excess is identified it would be trimmed. Mid level Managers are not an exception to this scrutiny,” Mayur Taday, chief business officer at TeamLease Services told CNBC-TV18.com.With layoffs being so rampant in the industry, experts suggest that companies might want to axe a manager who suddenly has fewer reports to deal with in the wake of thousands of layoffs.There is increasing pressure on middle managers to do more with fewer resources, both from above - receiving management directives to do more with less - and below - enforcing return-to-office policies and navigating new hybrid workplaces. According to Slack Technologies Inc.'s Future Forum, middle managers are the most exhausted of all organizational levels. As per the survey 43 percent of middle managers are burned out. Data suggests that this does reflect in the production of the employee as well.As per Anshuman Das, CEO and Co-founder, Careernet in cost cutting measures non-revenue generating projects and non-performing teams or employees have to bear the brunt. While companies typically prioritise cutting costs in areas that are not contributing to the bottomline, they also consider laying off employees or letting go of projects that are not meeting performance expectations or do not align with the revised business plans any longer.“As a result, businesses are increasingly focusing on hiring hands-on managers. Managers are expected to act as individual contributors and also be hands-on rather than just being project managers or people managers,” said Das.Further a recent report by job portal Naukri.com mentioned that information technology roles and senior professionals will be the most impacted by hiring corrections. in 2023. Recruiters expect the maximum layoffs to be for senior professionals, with 20 percent of recruiters predicting the same. Freshers are expected to be the least impacted by hiring corrections.What could be the reason for companies going after mid managerial roles now?Technically mid managers are employees at higher pay grade and as per data by 365 Data Science, which analysed the public LinkedIn profiles of 1,157 workers laid off from tech companies in the first wave of layoffs happened to employees. These employees were mainly hired as part of over-hiring during the pandemic resulting in a lot of fresher roles. As fewer managers also mean less overhead, companies can now go for mid-management roles in the second round. The chain of command will also be cut down a few links, which means fewer approvals to get caught up in before a project can begin hence having a faster workflow.Experts suggest that another reason can be the increased presence of Artificial Intelligence and Automation in the workplace. Data by 365 Data Science showed that the largest largest group of laid-off employees did not hold tech jobs—27.8 percent worked in HR & Talent Sourcing. This suggests that job and recruitment industry is moving towards the era of automation.Looking at the potential of ChatGPT, tech giant Microsoft is in talks to invest $10 billion dollars in OpenAI, and Google recently launched its own AI technology Bard as a competition to ChatGPT. So, according to Das, advancements in technology and automation can lead to the elimination of mid-management roles that are no longer necessary.While everything looks gloomy right now experts also suggest that cut backs are not always permanent, and companies may add mid-management roles again in the future as business conditions change.Also read: Hit by layoffs? Hiring experts and counsellors share ways to manage anxiety, debt and job applications

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Are mid-management roles the next target in tech layoffs? Here's what experts have to say

By Nishtha Pandey Feb 21, 2023 10:09:54 AM IST (Published)

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Are mid-management roles the next target in tech layoffs? Here's what experts have to say

By Nishtha Pandey Feb 21, 2023 10:09:54 AM IST (Published)

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