Millennium Post

Exposed vulnerabilities

After the subsiding of the Great Resignation trend, the labour market appears to take a U-turn globally — and not for very favourable outcomes. Some major tech and Crypto companies have announced massive layoffs as the global economy appears to be headed towards a recession — after over ten years of economic boom. Be it the 2008 financial crisis or The Great Depression of the 1930s, it had been the labour market that took the deepest toll, again and again. In the present context as well, with just the initial signs showing up, the labour market has been the first to take the back seat. The core and typical vulnerabilities of the segment have remained unchanged despite heavy back-patting around "transformative" labour reforms globally. Among the recent companies, Coinbase — a leading crypto exchange — announced an 18 per cent layoff (1,100 employees), including 10 per cent in the India office last week. Interestingly, after a month it had announced to hire 1,000 employees in India alone, the company came to a realization that they had over-hired a year ago! The CEO and founder of Coinbase took this decision "to ensure we (the company) stay healthy during this economic downturn." The company grew heavily on the back of its employees during its initial phase, and is now well within its rights to chalk out a way forward for healthy growth. But what about the well-being of the affected employees? Will it be left to the whims and fancies of the employers? The company has offered a minimum of 14 weeks of severance, and an additional two weeks for every year of employment beyond one year. It has also expressed willingness to get its employees planted in other firms through a Talent Hub. Temporary health insurance is also assured for the US-based employees. This is the least the company could have done as a part of a face-saving exercise against its mass layoff. Furthermore, there is also a company that announced mass layoff with a one-week severance period! Owned by the world's richest person, Tesla decided to lay off 10 per cent of its employees. The company has been sued by its former employees for not complying with the Federal laws. Laws in the US require a 60-day notification period under the Worker Adjustment and Retraining Notification Act. Shockingly, Elon Musk termed the lawsuit to be trivial, saying that "anything related to Tesla gets a lot of clicks, whether it is trivial or significant." Motivation behind Elon Musk's decision was once again the rather late realisation that he had hired more than he required a year ago. After making big money on the backs of employees, the companies are now finding an urge to resort to a "course correction". Amid the global slowdown, Crypto lending firm BlockFi also decided to go for a 20 per cent layoff in a decision that "brings us (BlockFi) great sadness." In fact, the potential risk of recession appears to be the broader factor that has led to the increasing trend of layoffs. Many small and big companies are going for it and, if others also bandwagon, it should not come as a shock. This leaves us with a critical question, where is the labour market headed amid the current global turmoil? There is also a need for honest retrospection as to why the labour market is among the firsts to fall vulnerable to global crises. The ailing of the labour market needs to be recognized and fixed in the long term. The widespread looming fear of being fired points towards a lack of proper structural protection for employees — even in the 21st-century world. However, immediate remedial measures are of paramount importance currently to ease off the apprehensions of affected workers. Given the wide-ranging fluctuations and uncertainties in the corporate sector, the employees must also themselves resort to long-term planning by adopting insurance cover, exploiting contingency funds and saving in the longer run.

Next Story
Share it