Every December, around the holidays, Spotify unleashes its viral marketing campaign, “Spotify Wrapped,” in which users share their top results for their most-listened music and podcasts. This year, amid the trend, the streaming platform called it a wrap for more than 1,500 of its employees, as the company announced Monday its plan to cut 17% of its staff in its third round of layoffs. Wall Street applauded the news, sending stock prices soaring 7%.
Cutting jobs around the holiday season is widely perceived as cold, brutal and lacking basic compassion. Workers are left jobless and without a steady paycheck and are concerned about their lack of health insurance. Instead of looking forward to some time to relax and enjoy being with their family and friends, the downsized employees must now scramble to write a résumé and seek new employment in a challenging environment for white-collar professionals.
Executives may consider this a way to cut costs and save money, while others view it as a company showing its true colors. It’s clear that when organizations say, “We’re family,” it is not true. Grandma getting fired before Christmas doesn’t sound like something a loving family would do to someone they sincerely care about. Companies that let go of workers at this time of year will likely see backlash and lose respect within the marketplace, making it hard to recruit and retain people.
Say It Ain’t So
There are several reasons why employers see the year-end as an opportune time to cut jobs. By laying off staff in December, companies can realize salary savings earlier by removing employees from the current fiscal year’s books. For public companies, it can boost short-term financials and increase stock prices.
It’s sneaky, but some executives may feel that as people start to take their vacation and personal time off, there will be minimal disruptions as many people won’t be around. To cut costs, pushing out workers will save the company from paying expensive annual bonuses, incentives and sales commissions. It’s also convenient to conduct layoffs amidst the rollout of a yearly holiday campaign, so the buzz around it can drown out the news of downsizing.
On the same day that Spotify CEO Daniel Ek announced job cuts, Twilio, a cloud-based communication platform, said it would also be laying off nearly 5% of its staff after pressure from investors to divest its data and applications unit.
Before the 2021 holiday season, online mortgage startup Better.com’s CEO, Vishal Garg, terminated around 900 employees via a one-way Zoom video. To add insult to injury, Garg referred to his staff as “dumb dolphins.” The company became the poster child for callous video firings after online backlash.
During the financial crisis, Bank of America drew public indignation for announcing its three-year plan to cut up to 35,000 jobs in December 2009, after receiving billions in government bailout funds. This led to a deluge of highly negative consumer sentiment about corporate greed.
The Aftermath
Getting a pink slip is detrimental to a worker’s mental health and financial situation. It’s even worse when it happens around the “most joyous” time of the year. For some, it may mean fewer presents under the Christmas tree or opting out of holiday travel to visit family because it is no longer financially viable. Disregarding the fired personnel’s feelings will leave a permanent reminder of the people cast out.
Once word gets out, why would anyone want to remain at the organization? It also presents a hurdle for future hiring, as the news dissuades people from interviewing with the company. Consumers may even boycott its products and services.
There will be public backlash and reputational damage, as the action looks needlessly cold and lacks empathy. Upon learning about the layoffs, talent acquisition and recruiters will descend upon the company looking to poach all the A-players. Current employees will commence updating their résumé and contacting their network to find a new job. The remainers will suffer from survivor’s guilt, resulting in a plummet in employee engagement and productivity.
What You Should Do Right Now
Getting laid off right before Hanukkah, Christmas, Kwanzaa or New Year’s is incredibly difficult. Here are some actionable steps you can take if you are in this position this holiday season:
- Take some time to process what happened and acknowledge your anger and resentment. It’s okay to vent to loved ones to get it out in the open. After your grieving period, you must take action to move forward.
- Take care of practical matters, such as asking for emails and phone numbers of people you want to stay in touch with. Ask HR for a letter of recommendation. Find out your rights, any monies owed to you and whether outplacement services are available. File for unemployment benefits and look into your firm’s COBRA health insurance process.
- Start rebuilding your career and seeking out new opportunities. Update your résumé and LinkedIn profile and perform an audit of your professional online presence. Reach out to people in your network. Ask them about any job leads at your desired companies. Search job boards and apply to positions. While others coast during the holidays, ensure you’re hustling to get noticed.
- Avoid becoming antisocial because you feel shame about your job loss. Push yourself to stay connected with people during the holidays, as it’s a good time to call in favors and ask for help in seeking new employment.
Source: Forbes
