Here is everything you need to know about lay-offs and dismissals - explainer

Companies across the world are being forced to lay off thousands of people due to recession.

 The Google logo at Alphabet's Googleplex headquarters in Mountain View, California, in 2018.  (photo credit: DREAMSTIME/TNS)
The Google logo at Alphabet's Googleplex headquarters in Mountain View, California, in 2018.
(photo credit: DREAMSTIME/TNS)

January has been filled with headlines around the globe announcing job cuts at company after company.

The current layoffs are across multiple industries, from media firms to Wall Street, to factory staff, but so far they are hitting Big Tech especially hard.

Alphabet, Google’s parent company, said Friday it is laying off 12,000 workers, which is 6% of its workforce and amounts to its biggest layoff plan to date.

Microsoft is laying off 10,000 employees. Globally, the tech giant has 221,000 full-time employees with 122,000 of them based in the US.

Vox media announced that it is cutting 7% of its staff, or about 130 people. Amazon’s pledge to cut 18,000 jobs was a significant escalation from the estimated 10,000 widely reported late last year. While it’s still only 1% of Amazon’s 1.5 million global employees, the layoffs are the largest in the company’s history.

 Amazon is shutting down its fledgling health care service, Amazon Care, at the end of this year. Shown is an Amazon facility in Sunnyvale, California. (credit: DREAMSTIME/TNS) Amazon is shutting down its fledgling health care service, Amazon Care, at the end of this year. Shown is an Amazon facility in Sunnyvale, California. (credit: DREAMSTIME/TNS)

The global recession did not pass on investment banking firms. Goldman Sachs will lay off up to 3,200 workers this month amid a slump in global dealmaking activity. More than a third of the cuts are expected to be from the firm’s trading and banking units (Herald-review).

What starts in the US ultimately always follows in Israel, and thus we have witnessed several big companies initiate lay-off plans, such as the Fintech unicorn Tipalti that will lay off 123 employees, amounting to 11% of its workforce. Pagaya is preparing to lay off over 100 employees, accounting for 15% of its workforce. So is the Israeli startup Namogoo, which has embarked on a second round of layoffs in less than three months. The company is parting with 20 employees, making up over 15% of its workforce – and there are many more in the pipeline.

How does getting fired look around the world?

GETTING FIRED, also known as being terminated or dismissed, is bad enough, but how you are getting fired varies across different countries and cultures. In countries where the focus is on “task-orientation,” the process is more formal and regulated, while in other countries that are defined as “relationship oriented,” it may be more informal and based on the employer’s discretion.

Here’s what it’s like to be fired in the following countries.

In the US, Google’s employees woke up to find they were disconnected from their email and from the company server. Layoffs in the US are quick and dirty. American managers typically meet with their employees to inform them they must leave before giving them just a few hours to pack their belongings. Part of the reason is the country’s “at-will” employment contracts between workers and their companies. Such contracts allow employers to fire subordinates for any reason at any time, so long as it’s not discriminatory.

Erin Meyer, a professor at global business school INSEAD told Business Insider: “Firing in the US is like pulling off a Band-Aid: you have a problem, you pull off the Band-Aid, it hurts a lot, then the problem is gone. In Europe, it’s more like boiling a lobster: you put the lobster in, slowly the lobster cooks, and finally the time is done.”

In European countries, in general, the process of getting fired is typically more regulated than in the United States. For Deutsche Bank, which is set to fire 18,000 employees around the world, the layoff process may look totally different depending on where it happens. 

The difference between the US and Germany lies in Germany’s relationship-based culture and the country’s worker-friendly policies. German employees develop close relationships with their coworkers, making severing ties more personal for the employer. 

In addition, the country also has progressive federal employment laws that require employers to provide valid reasons for termination, such as poor performance or violation of company policies. Lastly, employers must also provide notice and follow specific procedures before terminating an employee.

In the UK, employees are hired by way of “indefinite employment,” meaning they can’t be fired unless there is a good reason to do so. According to the Harvard Business Review, British organizations tend to lay off older employees before younger ones. In addition, laid-off employees may typically be able to stay for weeks following the termination notice to finish projects and even begin job hunting while still at their old companies.

IN ASIAN countries, the process of getting fired may be more informal.

While employees are getting fired in the West, they will be facing pay cuts in the East.

Cultural differences, specifically the East’s paternalistic attitude, are the reason behind why Asian firms make a bigger effort to preserve jobs. Michael Benoliel from Singapore Management University (SMU) explains that in the Confucian mindset, the “right thing to do is to share the burden.” Asia is a collectivist culture and therefore responsibility is shared by the group, whereas the West is characterized by an individualistic culture: each to his/her own. 

Many Asian companies feel that they have an obligation to take care of the “members of the family and go through the pain together.” For example, in Japan, the process is typically based on the employer’s discretion and is not governed by strict labor laws. Employers may terminate an employee for any reason and do not have to provide notice or follow specific procedures. 

Having said that, layoffs are rare in Japan, due to the country’s “lifetime employment system” where full-time workers typically remain at the same company for years. As a result, laid-off employees, who don’t have roles at their company anymore, sometimes continue to go to work and sit in “chasing-out rooms” working on other projects. This approach is tied into Japan’s cultural mindset around work, as well as government policies that discourage companies from firing workers.

How does getting fired work in Israel?

ISRAELI LABOR laws fall somewhere between the US and the European approaches: a box of belongings and escort out of the building versus notice and time transition. In Israel, an employer may not legally dismiss a worker without prior notice and due compensation. Employers wishing to dismiss an employee are required to give written notice. From the time such notice is given until the termination of employment, the employer must grant employees the same working conditions they were entitled to before. 

The length of the notice period depends on the employees’ length of employment. After a year of employment, they are entitled to one month’s notice. Employees who have completed less than one working year are entitled to one day of advance notice for each of the first six months of work, and two and a half days for each additional month (Relocation source).

In conclusion, the process of getting fired varies across different countries and cultures. In the United States and European countries, it is typically more regulated, and employees have more rights, while in Asian and Middle Eastern countries, the process may be more informal and based on the employer’s discretion.

The good news is that more and more companies now offer counseling and consultants to help employees find jobs elsewhere – “they’ll still kill you, but now they do it gently.”

The writer is a cross-cultural business consultant, with extensive experience in US, Israeli and global business culture. Founder of TrainingCQ, Arona specializes in cross-cultural and virtual communication consultancy, with over 25 years of experience in culturally related issues.