Spotify to cut 1,500 jobs—See how to deal with cold, hard layoffs this holiday season

Every December around the holidays, Spotify launches its viral marketing campaign, “Spotify Wrapped,” in which users share their top results for the most listened to music and podcasts. Amid the trend this year, the streaming platform called it a wrap for more than 1,500 of its employees, as the company announced Monday plans to cut 17% of its staff in the third round of layoffs. Wall Street applauded the news, sending stock prices up 7%.

Cutting jobs during the holiday season is widely seen as cold, brutal and lacking in basic compassion. Workers remain unemployed and without a stable salary and worry about the lack of health insurance. Instead of waiting for some time to relax and enjoy being with family and friends, downsized workers must now try to build a resume and look for new employment in a demanding environment for white-collar professionals.

Executives may see it as a way to cut costs and save money, while others see it as a company showing its true colors. It is clear that when organizations say, “We are family,” it is not true. Getting Grandma fired before Christmas doesn’t sound like something a loving family would do to someone they genuinely care about. Companies that lay off workers this time of year will likely see backlash and lose respect in the marketplace, making it difficult to recruit and retain people.

Say it ain’t so

There are several reasons why employers see the end of the year as an opportune time to cut jobs. By laying off staff in December, companies can realize payroll savings earlier by taking employees off the books for the current year. For public companies, it can boost short-term financials and boost stock prices.

It’s sneaky, but some executives may feel that as people start taking their vacations and personal time, there will be minimal downtime since many people won’t be around. To reduce costs, shedding employees will save the company from paying expensive annual bonuses, incentives, and sales commissions. It’s also convenient to have layoffs in the midst of rolling out an annual holiday campaign, so the buzz around it can drown out the news of downsizing.

On the same day Spotify CEO Daniel Ek announced job cuts, Twilio, a cloud-based communications platform, also said it would lay off nearly 5% of its staff after pressure from investors to allocate its data and applications drive.

Ahead of the 2021 holiday season, online mortgage startup Better.com CEO Vishal Garg laid off about 900 employees via a one-way Zoom video. To add insult to injury, Garg referred to his staff as “dumb dolphins”. The company became the poster child for violent shooting videos after online backlash.

During the financial crisis, Bank of America drew public outrage over its announcement three-year plan to cut up to 35,000 jobs in December 2009 after receiving billions in government bailout funds. This led to a deluge of highly negative consumer sentiment about corporate greed.

The consequences

Getting a pink slip is detrimental to an employee’s mental health and financial situation. It’s even worse when it happens at the “happiest” time of year. For some, it may mean fewer presents under the Christmas tree or opting out of holiday travel to visit family because it’s no longer financially viable. Ignoring the feelings of dismissed staff will leave a lasting reminder of the people who were pushed out.

Once word gets out, why would anyone want to stay with the organization? It also presents a barrier to future hiring, as the news discourages people from interviewing with the company. Consumers may even boycott its products and services.

There will be public backlash and reputational damage as the action appears needlessly cold and lacks empathy. Once they hear about the layoffs, talent acquisition and recruiters will end up with the company that wants to go after all the A players. Current employees will start updating their resumes and reaching out to their network to find a new job. The rest will suffer from survivor’s guilt, resulting in plummeting employee engagement and productivity.

What should you do right now?

Getting fired right before Hanukkah, Christmas, Kwanzaa, or New Year’s is incredibly difficult. Here are some steps you can take if you find yourself in this position this holiday season:

• Take some time to process what happened and acknowledge your anger and resentment. It’s okay to vent to loved ones to let it out. After your grieving period, you need to take action to move on.
• Take care of practical things like asking for emails and phone numbers of people you want to stay in touch with. Ask HR for a letter of recommendation. Find out your rights, any money owed to you, and if relocation services are available. Apply for unemployment benefits and review your business’s COBRA health insurance process.
• Start rebuilding your career and looking for new opportunities. Update your resume and LinkedIn profile and audit your professional online presence. Reach out to people in your network. Ask them about any potential jobs at the companies you desire. Search job boards and apply for positions. While others coast during the holidays, make sure you hurry to get noticed.
• Avoid becoming antisocial because you feel ashamed of losing your job. Push yourself to stay connected with people during the holidays, as it’s a good time to ask for favors and help with your new job search.