It is amazing how quickly we have gone from “no one wants to work anymore” to seeing record-breaking layoffs. From the outside, it looks as though no one who has ever so much as recorded a day in the life or Instagrammed before 6pm is safe. Even (or especially) if they’re working for one of the industry giants who have been posting all-time-high profits. So what gives? 

If you, like me, were convinced that these sweeping layoffs were some sort of giant red flag for the economy, then you’ll be just as surprised as I was to see the stock market climbing after months of sideways trading (at best). The strangest part, or at least the most surprising, is the who of it all. You might expect this behavior for startups, or even for growing companies, but established mainstays like Google, Netflix, and Amazon are some of the biggest culprits. It would have made sense, or at least could have been easily explained away, if companies that necessarily must keep an eagle eye (and iron grip) on their spending were the ones leading the layoff charge. Instead, some of the biggest names in business and in tech are the ones you’re hearing about sending thousands upon thousands of employees packing. 

But, upon closer inspection, that might not be so alarming after all. For one thing, these giant companies were the ones that were able to go on massive hiring sprees over the past few years. And while you might expect some measure of overstaffing for these giants, it’s possible that a lot of these companies just let their hiring practices get away from them. 

Then there’s the fact that employing an individual isn’t just an expense for a business in terms of the salary and benefits they receive. It’s also expensive just to put these people in a building, turn the lights on, get each one a desk and a computer, etc. Add on top of that the other perks (coffee lounges, ping pong tables, onsite gyms, you name it), and you’re looking at an expense that begins not to make much sense on paper. Some sort of over-employment buffer can be a good thing. And I don’t just mean that businesses won’t have to endure staffing crises every time someone gets sick, goes on PTO, or parts with the company. Beyond that, these over-employment buffers allow companies to brace for the unexpected. If a website only requires 5 people to run, debug, and keep stable, that doesn’t mean that it’s a five-person operation. Even without talking about the person-hours needed to innovate and compete in a larger market, and adapt to changing tech and trends, a company also relies on intentional overstaffing to deal with emergencies, pivots, and other shake ups that just can’t be planned for on the weekly schedule. And again, that’s all on top of covering for turnover, vacation, and sick days, etc. 

So at a time when more and more people are returning to a physical working environment, which represents a greater expenditure for the brand right from the outset, and at a time directly following a period of extreme hiring, perhaps it’s not the biggest surprise of the century that these layoffs are happening. Don’t get me wrong, that doesn’t mean that these companies can no longer be considered irresponsible for their termination practices, it just means that the irresponsibility goes all the way back to their hiring practices. Especially because of the kind of firing that is going on now. 

The stock market is doing rather well, remember? The bull is rearing up. Why is that? Why aren’t investors worried about these companies that are dropping employees like never before? It’s because of the kind of firing that it is, and what the underlying cause is behind it. These layoffs aren’t a last-ditch effort of trying to keep the company afloat. They aren’t dumping everything that isn’t bolted down just to stay above the waterline. They’re just doing it to increase their margins. From an investor standpoint, reducing costs is obviously a good thing, especially when it doesn’t signal any broader concerns. Of course, individuals who worked at these companies, often in key, highly-trained, highly-specialized roles, suddenly getting laid off can be devastating. And you won’t blame any of them for not taking the whims of the investors into account, nor the leadership’s ability to cut costs. Those impacted by the layoffs at Peloton, for example, might at least be able to wrap their heads around it and understand why it had to happen. But those who were working for companies that were continuing to achieve success after success, and do so because of the hard work of the employees, are unsurprisingly shocked and disappointed. And it’s difficult, even from the public perspective, not to judge the companies more harshly who are laying off employees to put an extra buck in each executive’s pocket, in comparison to those that are downsizing out of necessity.