Software programmes to take lead role in layoffs

Layoffs in an anticipated recession this year will be made by software programmes, feel experts.

Recession fears, persistent inflation, and rising interest rates continue to force tech giants to lay off tens of thousands of employees. Google, Amazon, and Meta have fired nearly 40,000 employees combined.

More than 65,000 employees have been sacked by 166 tech companies recently. In December, ResumeBuilder.com surveyed 1,000 business leaders to understand how employment in their organizations has fared in 2022 and the outlook for 2023.

As much as 61% of business leaders say their organizations will likely have layoffs in 2023. 57% of business leaders who say layoffs are likely and estimate 30% or more of their workforce will be laid off this year. 70% of companies are likely to implement a hiring freeze in 2023.

Layoffs in an anticipated recession this year will be made by software programmes, predicts experts. Business Insider reported that Meta contractors were told in June that they were picked by an algorithm to be laid off.

Software deployment to pick people for layoffs

Businesses are turning to software programmes not just to figure out whom to target in any layoffs but to decide how to reduce labor costs. HR tech companies say businesses typically use the software as a tool but managers make final decisions.

The programmes look at employees’ performance ratings, skill sets, tenure at the company, titles, and engagement levels, among other factors, executives say. Layoffs based on data rather than gut feelings helps remove bias and increase decision making that is best for the long-term health of the company, according to an HR expert.

A total 98% of human resources leaders say they will depend partly on software programs, or algorithms, to decide whom to cut if they have to conduct layoffs in an anticipated recession in 2023, according to a recent survey by Capterra, which helps small businesses choose software.

AI also used for objective performance evaluation

That is up from just 2% of large companies that turned to Big Data in the Great Recession of 2007-09, according to Capterra, a unit of tech research giant Gartner. “Over the past 15 years, the market for HR software has exploded,” Brian Westfall, Capterra’s principal HR analyst, has been quoted saying in the report.

AI also is used for objective performance evaluation to help managers decide who stays and who goes. AI software startups like GoFusion Perfacto and Entomo use data from employee productivity, attendance record, and other KPIs to help separate the star players from the rest on the basis of objective performance metrics.

Sanjeev Ramachandran

A journalist with 23 years of experience, Sanjeev has worked with reputed media houses such as Business Standard, The Ne More »

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