Layoffs. The word itself feels heavy. It shows up in headlines, LinkedIn updates, and whispered hallway conversations. In the tech world especially, we’ve seen waves of them—big, small, unexpected, and sometimes quietly executed. But here’s the thing no one really talks about: layoffs aren’t always about bad business.
I’ve been on both sides of the table—as someone in tech and someone who reads and thinks deeply about how business decisions are made. And trust me, there's a whole hidden playbook behind these layoffs that doesn’t make it to your newsfeed.
Let’s unpack it.
1. It’s Not Always About Profit Loss
When a company lays off people, most assume the business must be struggling. But many of the biggest layoffs in recent years? Happened in profitable companies.
Meta cut over 20,000 jobs in 2023. Amazon, Google, Microsoft—all made sweeping workforce reductions. Were they losing money? Not really. In fact, some of them posted record profits right around the same time.
So why lay people off?
Because layoffs aren’t always reactive—they’re often strategic.
2. Investor Optics & Stock Prices
Public companies live and breathe on how they’re perceived by investors. Fewer expenses = higher profit margins = more attractive stock.
Announcing a "cost-cutting initiative" sends a message to Wall Street: We're being lean, efficient, and focused on growth.
The irony? The stock price often goes up after layoffs, even if nothing else changes. It's not personal—it’s math. And perception.
3. Quiet Restructuring: The Unspoken Re-org
Sometimes, layoffs are just a fancy way of saying: We’re rethinking our direction.
Maybe a team isn’t delivering ROI. Maybe the company wants to move from services to products. Or from traditional enterprise solutions to AI. Cutting headcount allows them to reshuffle resources, eliminate resistance to change, or sunset certain functions quietly.
The press release says “streamlining.” What it really means? “We’re killing this department without saying it out loud.”
4. The “Overhiring Hangover” No One Predicted
During the pandemic boom, tech hiring went wild. Companies were hiring for roles just to fill seats. The logic? We’ll figure out what they’ll do later.
Then came the post-COVID slowdown. And suddenly, these extra hires—many of whom were never integrated properly—were seen as overhead. Not inefficiency, but excess capacity. And trimming excess is easy math.
Except it’s not easy for the humans on the other end of it.
5. AI, Automation & The Rise of “Do More with Less”
Let’s be real—companies aren’t just cutting costs. They’re replacing people with tools.
AI has made many tasks—especially in testing, documentation, basic dev work, even support—easier to automate. With tools like GitHub Copilot, ChatGPT plugins, and enterprise LLMs, one developer can now do what used to take three.
So companies start looking at their workforce and think: If we train the top 20% and let go of the rest, we might still deliver 90% of the output.
It’s cold logic. But it’s becoming common logic.
6. “Culture Fit” as a Scapegoat
Sometimes, layoffs come disguised as “performance-based exits” or “cultural misalignment.”
This one’s tricky. It’s often used to mask subjective or politically-driven decisions. When leadership wants to make cuts but avoid legal red tape or severance responsibilities, they may dress it up as a performance call.
It’s the quiet kind of layoff—the one that never gets counted in the stats.
7. Global Arbitrage: Cheaper Doesn’t Mean Less Skilled
Another under-discussed reality: geo-based restructuring.
Let’s say a company has 50 engineers in California making $150K+. If they can hire 100 engineers in India or Eastern Europe for half the cost, and maintain similar productivity levels—guess what happens?
You guessed it.
Global hiring isn’t about compromising quality anymore. It’s about cost-to-output ratios. And companies are leaning into that hard.
8. Layoffs as a Leadership Power Play
Here’s one you almost never hear: sometimes layoffs happen because new leadership needs to make a mark.
A new VP joins, and they want to bring in “their people.” Or they need to show they’re serious about “efficiency.” Cutting headcount becomes an easy way to flex control and gain favor with the board.
It’s office politics at scale.
So, What Does This Mean for Us?
As workers—especially in tech—it’s easy to think of layoffs as personal failures. Like we weren’t good enough, fast enough, technical enough.
But most of the time? It’s not about you.
It’s about shifting priorities, stock prices, or someone’s promotion roadmap.
Understanding the business behind layoffs doesn’t make them easier, but it gives you clarity. And sometimes, that’s the difference between spiraling and strategizing.
If you’ve been laid off recently: take a deep breath. You’re not alone. And you’re not less valuable.
Just remember: you were part of a business decision—not a personal evaluation.
Final Thought
We need to talk about layoffs more openly—not just the emotional side, but the operational reality behind them. Because when you understand the system, you can stop blaming yourself and start making smarter moves.
And if you're still in the game? Keep leveling up. Stay aware. And always remember—you are not your job title.