Imagine laying off thousands of employees, only to turn around and have to hire nearly as many back…
Well, Sasan Goodarzi, CEO of financial software company Intuit, announced performance-related layoffs affecting roughly 1,800 employees in a company-wide email last week—but plans to hire nearly the same number of employees, many for AI roles, Business Insider reported. Meanwhile, Tesla, just a few months after announcing layoffs affecting 10% of its staff, recently posted nearly 800 job listings, many also for AI jobs.
Intuit’s communications team responded to HR Brew’s request for comment by directing us to Goodarzi’s note to employees. Tesla did not respond to our request for comment by publication.
“There’s [an] AI talent arms race happening right now across big tech companies, and really outside of tech as well…and this sort of thing where you see organizations moving resources around is probably going to continue,” Joe Mull, keynote speaker and author of Employalty, told HR Brew.
Mull, along with Cy Wakeman, best-selling author and founder of leadership consulting firm Reality-Based Leadership, spoke with HR Brew about the challenges associated with hiring right after layoffs, and why, in this case, it might be worthwhile.
Talent frenzy. Hiring on the heels of layoffs can create short-term recruitment issues, Mull said, because candidates may feel “spooked” and uneasy about working for an organization that just made cuts.
“Companies end up shooting themselves in the foot,” he said. “If you have a tarnished reputation, or…if it’s just a perception that, ‘Hey, this organization is quick to lay off people,’ then that organization may end up having to overpay to acquire talent.”
Quick-to-read HR news & insights
From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.
As a result, Mull said, HR pros may find themselves having to spend more money to attract talent, or more time and effort trying to “woo talent and reassure them” of the company’s stability.
Why didn’t they just reskill? When an organization doesn’t have the talent it needs to succeed, HR leaders have to decide whether to buy, rent, or build talent, Wakeman said. But how can they make such a call?
“What companies have to look at, in talent, is we can buy it, which is hiring it. We can rent it, which is like gig economy or consultants. Or we can build it,” she said. “When you look at the gap between what people were doing and what you need them to do, if the gap [of reskilling takes] over 18 months, we usually don’t decide to build the talent.”
While buying talent can be expensive, Wakeman said it’s the fastest way to meet an organization’s talent demands, especially in a burgeoning area like AI, which companies may not have the resources to develop in-house. “It makes sense to me that they went out and bought it,” she said, “but the public doesn’t often understand, because it doesn’t seem humane. It seems really cold.”
Business leaders believe, Mull said, that AI’s impact on their products and services is “so crucial right now” that they don’t have time to reskill their current employees. “So they’re going to go out and try to recruit people who are already in that place professionally,” he said.