The effect of layoffs on the culture of survivors at major tech firms

Abstract

In the realm of organizational dynamics, the significance of work culture is paramount as companies navigate the transition from fledgling startups to established entities. This transition necessitates a strategic reinforcement and expansion of the existing culture to align with new objectives. However, the contemporary landscape of large technology-based firms, especially within the USA, has been marked by widespread employee layoffs, driven by evolving economic realities. These layoffs, constituting enforced personnel resignations due to economic constraints or downsizing, often precipitate cost-cutting measures, including outsourcing. Amid this evolving scenario, organizations grapple with the challenges of effectively managing survivor cohorts while upholding a favourable work culture. This research underscores the intricate interplay between organizational culture, workforce layoffs, and employee sentiments, shedding light on the outcomes of mandated terminations on survivors' performance, their perception of organizational culture, and their future outlook. The research hypothesis posits an adverse relationship between mass layoffs and employees' cultural perceptions. Drawing insights from a study encompassing 65 employees across diverse global tech organizations, the empirical analysis validates the conjectures set forth. The findings reveal that survivor performance exhibits a decline in the aftermath of layoffs, particularly among those witnessing a transformation in their understanding of the organization's culture. This shift is associated with a nuanced future outlook, marked by ambivalence.Significantly, this research highlights a distinct pattern of negative responses among individuals who had previously enjoyed robust managerial support or high levels of employee satisfaction. This phenomenon alludes to a sense of perceived betrayal experienced by such individuals in the wake of layoffs. The research underscores the complexities of post-layoff emotional responses and their implications, ultimately enhancing our comprehension of the broader impact of mass layoffs within the organizational context. Notably, the study identifies an intriguing moderating influence of corporate culture on employee reactions to mass layoffs. While this research advances our understanding of the intricate interplay between mass layoffs and organizational culture, the moderating role of diverse cultural orientations warrants further exploration. The implications of these findings for organizational management strategies, employee well-being, and long-term performance are topics of consequen