89% of Firms Say Elon Musk Inspired Them To Try Layoff Alternative

After acquiring Twitter, Musk told staff to work longer hours or he'd pay them to quit. Other companies took notice.

89% of businesses that offered voluntary separation agreements in 2022 in an attempt to avoid making more layoffs say they “took their cue” from Twitter chief Elon Musk.

After acquiring the social media platform last year, Elon Musk issued an ultimatum to Twitter’s staff: work longer hours and go “extremely hardcore”, or quit and receive severance pay – also known as a “voluntary separation agreement”.

Layoffs made the headlines on an almost-daily basis throughout 2022, with the tech sector witnessing record numbers of redundancies as the entire global economy suffered. While alternatives like voluntary separation are being explored, it's unlikely to reverse the trend completely.

Musk: A Turbulent Trendsetter

According to a survey conducted by Resumé Builder, 89% of companies offering voluntary separation in 2022 said they were inspired by Elon Musk’s decision in November of last year to offer a form of such to staff who aren't prepared to go “extremely hardcore” and do lots of additional work.

Famously, after making the announcement, Musk said employees only had until the end of the day to decide whether they wanted to stay or jump ship. As with much of his behavior at the helm of Twitter, he was widely criticized for the decision, and 1,200 employees resigned following his crassly delivered ultimatum.

Of the 89%, half (50%) admitted they were strongly inspired by the billionaire tech tycoon’s actions, while 39% said they were “somewhat” influenced by him.

Musk has been forced to make additional layoffs since then, but for the companies he inspired, it’s largely been a different story; 95% of businesses report that voluntary separation either was either “somewhat” or “highly” successful in preventing layoffs.

However, 53% of companies say they still need around 20% of their workforce to leave voluntarily to avoid making more staff redundant over the next year.

Voluntary Separation: the New Norm?

Over 95% of companies have admitted they are either “very likely” or “somewhat likely” to offer voluntary separation to employees in 2023, in an effort to avoid continually making layoffs, Resumé Builder found.

61% of these businesses say they will offer even more voluntary separation agreements than they did this year while 49% of businesses that were yet to offer voluntary separation said they were likely to start offering agreements in 2023.

The hope for many executives is that employees already “quiet quitting” and doing the bare minimum that they're contracted to do will simultaneously be most inclined to leave and least likely to be missed by the business.

The Downsides of Voluntary Separation

Although 90% of businesses said that voluntary separation will help them reduce costs, there is some fear that the practice could ultimately turn out to be counterproductive for companies.

68% of those who answered the survey admitted they worry that offering voluntary separation agreements will lead to the company losing its best employees.

If you give employees monetary incentives to leave their jobs, there will always be a proportion that takes you up on that offer. However, you'll have to have to consider the effect making a string of layoffs will inevitably have on the morale of existing employees.

For tens of thousands of companies struggling in the current economic climate, 2023 will be full of difficult decisions like this. Whether turning to Elon Musk for direction again is a good idea, however, is certainly questionable.

Written by:

Aaron Drapkin is a Senior Writer at Tech.co. He has been researching and writing about technology, politics, and society in print and online publications since graduating with a Philosophy degree from the University of Bristol five years ago. As a writer, Aaron takes a special interest in VPNs, cybersecurity, and project management software. He has been quoted in the Daily Mirror, Daily Express, The Daily Mail, Computer Weekly, Cybernews, and the Silicon Republic speaking on various privacy and cybersecurity issues, and has articles published in Wired, Vice, Metro, ProPrivacy, The Week, and Politics.co.uk covering a wide range of topics.

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