Will Tech Company Layoffs Spread to Higher Ed?

Meta, the parent company of Facebook, is laying off 13,000 employees. Twitter is parting ways with half its staff of 7,500. Educational technology (ed tech) companies have been working through painful downsizing for a couple of months, with layofftracker.com reporting significant staffing cuts at 2U, Byju, MasterClass, SkillShare, Eruditus and others.

Higher ed people may think we are insulated from the layoff contagion spreading to our campuses. We aren’t.

It is distressingly simple to come up with scenarios where many colleges and universities might need to resort to downsizing to stay financially viable. The drop in post-pandemic enrollments may not reverse. High inflation and low unemployment are major disincentives for working adults to take on graduate school debt. Labor costs, which comprise the vast majority of every university budget, continue to increase rapidly. And the areas that many universities were looking toward to bring in revenues to counter the twin forces of demographic headwinds and diminishing public funding—namely the development of new online degrees and nondegree programs—are seeing both increased student acquisition costs and significant drops in revenues as compared to the last couple of years.

Here, the key word is “might,” as universities have yet to announce layoffs of the magnitude that we witnessed during the 2007–09 Great Recession or the early 2000s dot-com bubble recession. Recent endowment returns have been middling, but these losses come after a couple of years of astounding gains. The U.S. might fall into a recession in the coming months, a horrible development which is also paradoxically beneficial to countercyclical industries such as higher education.

So it might be that we will avoid the fate of tech, and large-scale layoffs will not come to our institutions. Let’s hope so. But as hope makes for a poor career strategy, now is the time to prepare ourselves for waves of university layoffs, should they materialize on our shores.

What are some things that those of us without the protections of tenure can do to prepare ourselves for the possibility of university layoffs? Three ideas.

1. Be Cautious in Hiring

Not everyone in higher ed can have much of a say in decisions to bring on new colleagues. For those in management and leadership roles, however, knowing that large-scale layoffs have in the past come to higher ed and could come again, some caution in hiring decisions may be wise at this time. As a leader or manager, among your top priorities should be avoiding layoffs. Downsizing is enormously damaging to universities’ culture, operations and productivity. We are institutions built on trust. To be effective, university employees must do a million and one things that nobody ever sees or recognizes. There needs to be a feeling that the institution is as invested in its people as its people are invested in the institution. Layoffs kill that trust.

Here, I do worry about recommending hiring caution, as universities suffer from what I’ve termed an invisible understaffing epidemic. Right now, there are too few people doing too much work across our campuses. This higher ed understaffing reality may be the flip side of the coin of pandemic-driven tech overstaffing. So any higher ed hiring slowdown will only exacerbate the overwork and burnout many university people feel. Still, at this point, I think staffing caution is warranted.

2. Commit to Protecting People’s Jobs

Again, this is more of an institutional—or divisional or unit—type of strategy, but it is one that people who work in higher ed can follow. These people are, again, university leaders and managers. It is university leaders and managers who have to implement layoffs if they come. And if those layoffs come to higher ed, they result mainly from exogenous forces outside of their direct control. (Such as high inflation, low unemployment, rising labor and health-care costs, drops in public funding, demographically and economically driven enrollment declines, etc.). What university leaders can do now is decide that come what may, the institution will do everything (and I mean everything) possible to avoid layoffs. Commit now and then work backward to prepare for how that commitment can be met.

The time to explore antilayoff strategies is not when the layoffs are about to occur. The best time is now when things are holding (shakily) steady. One idea is to work toward a community consensus that shared pain is preferable to downsizing. If the choice is between the highest-paid people at a school taking a 10 percent pay cut or the most vulnerable 10 percent of staff being let go, those fortunate, highly paid employees may agree in advance that this is a reasonable trade-off. People who control university budgets should look at what can be cut before people are let go. Figuring out how to save money outside of compensation (wages plus benefits) is challenging, as most of the money we spend at universities is compensation-related. Still, there are things that we can reluctantly give up if the upside is avoiding layoffs.

3. Be Ready to Find Another Job

The statement that we must be ready to find another job sounds callous and a bit tone-deaf. Nobody wants to blame the victims of layoffs should come to higher ed. Higher ed workers have complicated lives, with partners, kids and family members embedded in the communities in which they work. Few of us can easily move our families to where jobs exist and away from where the jobs are disappearing.

Still, forewarned is forearmed. Knowing that the layoffs we see now in tech might (might) come to higher ed should prompt us all to think about our plan B. How much emergency savings can you sock away, meaning what discretionary expenses might you be able to avoid? What are the possibilities of doing freelance and consulting work should your full-time gig go away? Have you maintained contacts, networks and relationships with colleagues at other schools that can let you know when jobs are posted? Is your résumé/CV up-to-date?

Reading the news about tech layoffs should prompt those of us in higher ed to have an open conversation about how to avoid what is going on in tech. Being clear about what we don’t want and the industries we don’t want to emulate is the responsible thing to do.