January 2023 has been filled with headlines around the globe announcing job cuts at company after company.
The current layoffs are across multiple industries, from media firms to Wall Street, to factory staff, but so far are hitting Big Tech especially hard.
Alphabet, Google’s parent company, said Friday it is laying off 12,000 workers, 6% of its workforce which amounts to its biggest layoff plan to date. Microsoft is laying off 10,000 employees. Globally, Microsoft has 221,000 full-time employees with 122,000 of them based in the US. Vox Media announced that it is cutting 7% of its staff or about 130 people. Amazon’s pledge to cut 18,000 jobs was a significant escalation from the estimated 10,000 widely reported late last year. While it’s still only 1% of Amazon’s 1.5 million global employees, the layoffs are the largest in the company’s history,
The global recession did not pass on investment banking firms. Goldman Sachs will lay off up to 3,200 workers this month amid a slump in global dealmaking activity. More than a third of the cuts are expected to be from the firm’s trading and banking units (Herald-review).
What starts in the U.S. ultimately always follows in Israel, and thus we have witnessed several big companies initiate lay-off plans, such as the Fintech unicorn Tipalti who will lay off 123 employees, amounting to 11% of their workforce. Pagaya is preparing to lay off over 100 employees, accounting for 15% of its workforce. So is the Israeli startup Namogoo, which has embarked on a second round of layoffs in less than three months. The company is parting with 20 employees, making up over 15% of the company’s workforce and there are many more in the pipeline.
Getting fired, also known as being terminated or dismissed, is bad enough, but how you are getting fired varies across different countries and cultures. In countries where the focus is on “task orientation”, the process is more formal and regulated, while in other countries who are defined as “relationship-oriented,” it may be more informal and based on the employer’s discretion.
Here’s what it’s like to be fired in the following countries:
Ripping off a Band-Aid versus boiling a lobster
In the U.S. Google’s employees woke up to find they were disconnected from their email and from the company server. Layoffs in the U.S. are quick and dirty. American managers typically meet with their employees to inform them they must leave before giving them just a few hours to pack their belongings. Part of the reason is the country’s “at-will” employment contracts between workers and their companies. At-will contracts allow employers to fire subordinates for any reason at any time, so long it’s not discriminatory.
Erin Meyer, a professor at global business school INSEAD told Business Insider: “Firing in the U.S. is like pulling off a Band-Aid: you have a problem, you pull off the Band-Aid, it hurts a lot, then the problem is gone. In Europe, it’s more like boiling a lobster: you put the lobster in, slowly the lobster cooks, and finally, the time is done.”
In European countries, in general, the process of getting fired is typically more regulated than in the United States. For Deutsche Bank, which is set to fire 18,000 employees around the world, the layoff process may look totally different depending on where they happen. The difference between the U.S. to Germany lies in Germany’s relationship-based culture and the country’s worker-friendly policies. German employees develop close relationships with their coworkers, making severing ties more personal for the employer. In addition, the country also has progressive federal employment laws that require employers to provide valid reasons for termination, such as poor performance or violation of company policies. Lastly, employers must also provide notice and follow specific procedures before terminating an employee.
In the U.K. employees are hired by way of “indefinite employment,” meaning they can’t be fired unless there is a good reason to do so. According to Harvard Business Review, British organizations tend to lay off older employees before younger ones. In addition, laid-off employees may typically be able to stay for weeks following the termination notice to finish projects and even begin job hunting while still at their old companies.
The West cuts jobs, Asia cuts pay
In Asian countries, the process of getting fired may be more informal. While in the West, employees are getting fired, in the East, employees will be facing pay cuts.
Cultural differences, specifically the paternalistic attitude is the reason why Asian firms make a bigger effort to preserve jobs. Michael Benoliel from Singapore Management University (SMU) explains that in the Confucian mindset, the “right thing to do is to share the burden”. Asia is a collectivist culture and therefore responsibility is shared by the group whereas the West is characterized by an individualistic culture, each to his/her own. Many Asian companies feel that they have an obligation to take care of the “members of the family and go through the pain together.”
For example, in Japan, the process is typically based on the employer’s discretion and is not governed by strict labor laws. Employers may terminate an employee for any reason and do not have to provide notice or follow specific procedures. Having said that, layoffs are rare in Japan, due to the country’s “lifetime employment system” where full-time workers typically remain at the same company for years. As a result, laid-off employees, who don’t have roles at their company anymore, sometimes continue to go to work and sit in “chasing-out rooms” working on other projects. This approach is tied to Japan’s cultural mindset around work, as well as government policies that discourage companies from firing workers.
The Israeli labor laws fall between the U.S.; a box of belongings and escort out of the building, and the European approach; notice, and time transition. In Israel, an employer may not legally dismiss a worker without prior notice and due compensation. Employers wishing to dismiss an employee are required to give written notice. From the time the notice is given until the termination of employment, the employer must grant employees the same working conditions they were entitled to before. The length of the notice period depends on the employee’s length of employment. After a year of employment, they are entitled to one month’s notice. Employees who have completed less than one working year are entitled to 1 day of advance notice for each of the first 6 months of work, and two and a half days for each additional month (Relocation source).
In conclusion, the process of getting fired varies across different countries and cultures. In the United States and European countries, the process is typically more regulated, and employees have more rights, while in Asian and Middle East countries, the process may be more informal and based on the employer’s discretion.
The good news is that more and more companies now offer counseling and consultants to help employees find jobs elsewhere; “they’ll still kill you, but now they do it gently”.
Originally published in Jerusalem Post