SUMMARY
For boards and founders, making the difficult decision to downsize the workforce can be emotionally taxing and fraught with uncertainties
From a governance lens, it becomes evident that a proactive approach, fostering a culture of adaptability and agility and investing in upskilling initiatives could have avoided such layoffs
The importance of governance cannot be overstated, especially in the face of an unpredictable economic landscape
As we navigate the turbulent seas of a global recession in 2023, the tech sector has been hit hard by mass layoffs, leaving thousands of employees in uncertainty.
Organisations must adapt to the changing landscape to safeguard their workforce and investor confidence. For boards and founders, making the difficult decision to downsize the workforce can be emotionally taxing and fraught with uncertainties.
From a governance perspective, this leads to a conversation about whether there are any proactive measures to mitigate the need for such drastic layoffs. The recent wave of layoffs at BYJU’S, Unacademy, Meesho, and several others has shed light on the critical role that effective governance plays in safeguarding employees’ livelihoods during challenging times.
These incidents are a reminder of the need for a well-crafted and agile governance framework that empowers organisations to navigate evolving market dynamics with resilience and foresight. From a governance lens, it becomes evident that a proactive approach, fostering a culture of adaptability and agility and investing in upskilling initiatives could have avoided such layoffs.
Companies that prioritise their employees’ personal growth and passion cultivate a resilient team capable of excelling in any future endeavour, ensuring long-term success.
By proactively implementing governance practices that prioritise the welfare of employees, startups can transform challenges into opportunities, securing a brighter future for the company and its employees. A well-structured governance framework at the board level plays a pivotal role in the growth and development of startups, even though some may perceive laws as constraining agility and rapid growth.
The reality is that compliance with laws is not an option but a necessity to build a sustainable and ethical business.
Creating awareness and fostering a culture of effective self-governance is essential for startups. From their inception, startups need to prioritise self-governance to keep their operations streamlined and in compliance with regulations. By doing so, they can weather market fluctuations, avoid layoffs and nurture a motivated and committed workforce.
The importance of governance cannot be overstated, especially in the face of an unpredictable economic landscape. It is a vital tool for organisations to navigate the business world, secure the well-being of their employees and pave the way for a promising future.
Governance can help navigate layoffs with sensitivity while safeguarding the long-term interests of both the company and its employees.
Proactive and responsible governance is essential for businesses to thrive in today’s rapidly changing and uncertain landscape. This means making strategic decisions that consider both economic benefits and social impact, as well as investing in the future of the workforce.
Key areas where proactive governance is vital include navigating economic uncertainties, ensuring a smooth transition during mergers and buyouts, future-proofing against obsolescence in the age of automation and making responsible relocation and outsourcing decisions.
By emphasising proactive and responsible governance, startups can better position themselves to navigate uncertainty and thrive in the long term.
The Elephant In The Room
The evolution of this mindset requires an awareness and consequent shift in gears from the focus on the hypergrowth model to one where the promoter is more focused towards building a sustainable and ethical business.
Addressing corporate greed falls under the purview of governance. By fostering a culture of fairness, respect and ethical conduct, companies can eradicate exploitative practices. A workforce treated with dignity and provided reasonable working conditions becomes the bedrock of sustainable growth.
In this challenging landscape, employees, too, play a critical role in securing their future.
Governance, as the compass guiding organisations through turbulent waters, holds the potential to build resilience and prevent the need for layoffs. By championing ethical practices, financial prudence and strategic foresight, we can collectively shape an equitable future for the workforce, even amidst global headwinds.
