Remember, the security of your job primarily depends on two major factors — how relevant you are for the organisation and how the organisation is aligned to its stakeholders (investors, clients and employees).
A three-part series on how to protect yourself from being laid off.
BYJU’S, one of India’s leading edtech firms, confirmed laying off approximately 500 employees at its group companies WhiteHat Jr and Toppr.
‘To reduce redundancies across our organisation after multiple acquisitions, we had to let go of nearly one per cent of our over 50,000 strong workforce,’ the Bengaluru-based firm clarified in its statement to Rediff.com.
‘This retrenchment was a strategic decision to improve business efficiencies throughout BYJU’S and its group companies. BYJU’S remains a net hirer,’ the company’s spokesperson added while claiming to be one of ‘India’s largest job creator among start-ups.’
BYJU’S is not the only Indian edtech company to cut a small percentage of its staff in recent times.
In April 2022, unicorn firms like Unacademy laid off 10 percent of its on-roll and contractual staff (approximately 1,000 people) followed by Vedantu which let go off of 7 per cent of its 6,000 odd employees in May this year.
Does this mean edtech firms — one of the largest beneficiaries of the pandemic — are facing pressure of an economic meltdown?
Not entirely, insists Abhimanyu Saxena who co-founded Scaler Academy in 2019 with the aim of bridging the tech employability gap.
“Online learning was always a niche market in India. However, during the pandemic there was a sudden demand for online learning, training and coaching which led to an extraordinary trend. Naturally, in the last two years, a lot of companies in the learning and education space went on a hiring spree to match consumers’ requirement. Now that things are moving back to normalcy, people are going back to traditional or hybrid learning, some of these resources are turning to be steep and unfortunately have to be let gone,” Abhimanyu tells Divya Nair/Rediff.com.
According to recruiting experts, in any industry or start-up, ambitious demand-based hiring cannot sustain in the long run if the business model changes or costs exceed profits and sales.
Amidst the slowdown in funding in the post pandemic environment, even as large firms seem to be struggling, Sumit Kumar, chief business officer, TLEF, strongly believes that edtech is a sunrise industry and has a bright future.
“Considering the new education policy which brings in flexibility in learning and encourages more employed learners to continue their education, the scope and potential is huge. Edtech, which has a sound business plan, a balance of B2B and B2C, invests in cutting edge technology, product optionality (variety of employability embedded courses), along with a creative brand and financial sensibility will go long way,” says Kumar.
Organisations which aren’t able to maintain a balance among these vectors, and a time balance between short-term goals and long-term strategy are bound to perish.
“Today very few organisations have a long-term view and many are created for an acquisition. The approaches are very different when you have these two different objectives,” observes Kumar while discussing how unicorn start-ups failed to justify their ambitions leading to layoffs and downsizing.
Having said that, a company is neither born or forced to shut down in a day. Usually, the signs of an economic meltdown are visible to all.
If you are vigilant enough, anyone can easily identify the red flags and take appropriate measures to protect the job and the company.
It’s important — both for organisations and employees — to do a fundamental check on the company’s vulnerability from time to time. You must evaluate the company’s financial performance, gross margin, sales and customer feedback to understand where you are and if you are on the right growth path.
Ask yourself these basic questions, suggests Abhimanyu:
- Is the company growing too fast or expanding at an unexpectedly rapid pace?
- Is the product you are selling marketable? What are the customer reviews suggesting?
- Where are the sales and profits coming from? What about ad revenue?
- Is the company spending too much on marketing or is it relying on word-of-mouth publicity to gain more customers?
If the company is spending too much on marketing, it could be a positive or negative sign, Abhimanyu warns. “Check if they are spending too much and simply making a noise in the market. If the tall marketing claims do not co-relate with the company’s current status and performance, it is a warning sign.”
How to know if your job is at stake?
When the company’s finances are at stake, layoffs are inevitable.
Remember, the security of your job primarily depends on two major factors — how relevant you are for the organisation and how the organisation is aligned to its stakeholders (investors, clients and employees).
While the risk factors of your employment may differ from time to time, it all boils down to the job profile you are hired and the company you are working at.
According to Abhimanyu, while tech, sales and marketing may seem like recession-proof careers, there are always some exceptions to your role and performance in a given company.
For example, if you are working in the core product and development team and the company’s products are performing well, you are driving the sales, you are an asset to the organisation.
However, if the product fails to take off due to poor marketing, funds or other reasons, even though you designed a good product, the company may not make profits and your job will still be in danger.
Stagnancy and complacency are other risk factors.
The intelligence you use in a job and how well you adapt your skills is what gives you an advantage from vulnerability.
The employers who cease to invest in themselves, fail to upgrade their employability factor, and are not adaptive are most likely to perish, feels Sumit Kumar.
Organisations do not down size, says Kumar, they right size the organisation during difficult times. And when they do so, the non-productive resources that are most likely to be laid off.
Monday: The layoff effect: Dealing with guilt, insecurity and poor morale
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