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Big Tech layoffs could have a serious impact on culture, leadership expert says

There's nothing more detrimental to the productivity of a workplace than watching trusted colleagues get escorted out of the building amid a mass reduction in force.

And with that vibe currently playing out in Big Tech, experts warn job cuts could damage the very fabric of these once-untouchable highly creative institutions.

"I think these companies got carried away with overhiring, and they were not careful, and they just hired willy-nilly, and now they’re facing huge layoffs," Bill George, former Medtronic CEO and leadership expert, said on Yahoo Finance Live (video above)."I tell you, the impact is going to be on their culture."

Potential culture shocks in Big Tech aren't too hard to find.

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Salesforce (CRM) — long a champion of its friendly Ohana employee culture under co-founder and CEO Marc Benioffsaid earlier this month it would slash 10% of its workforce and execute select real estate exits and office space reductions.

Microsoft (MSFT) — which has cleaned up its once rough Steve Ballmer-esque culture under CEO Satya Nadella — followed that news with 10,000 layoffs of its own. And Amazon (AMZN) then revealed 18,000 layoffs, although its culture has always been survival of the fittest dating back to founder Jeff Bezos.

In November 2022, Meta (META) unveiled 10,000 layoffs. Snap (SNAP) canned 20% of its workforce in August. Both of these companies were once put on a pedestal for offering generous employee perks such as high-end free lunches.

A view of Facebook parent company Meta's headquarters in Dublin as company layoffs are expected to be announced today. Picture date: Wednesday November 9, 2022. (Photo by Brian Lawless/PA Images via Getty Images)
A view of Facebook parent company Meta's headquarters in Dublin on Wednesday November 9, 2022. (Photo by Brian Lawless/PA Images via Getty Images) (Brian Lawless - PA Images via Getty Images)

In the case of Meta, it recently fired cafeteria workers to save money — a move that may come at the expense of its culture.

George thinks both innovation and diversity efforts will be hindered by the tech industry's sweeping layoffs.

"I think it's going to be a dose of cold water for a lot of these employees, who will say, 'Maybe this culture is not going to be as great as I thought,'" George added. "I think they are going to have a real cultural fallout."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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