2024: What the Spotify's Layoff of 1,500 Is Signaling

Amid stock market euphoria and recent high US Q3 GPD growth (4.9%) the 17% RIF at Spotify sends a scary message. That’s of a global economic slowdown. That's essentially because of interest rates. Prospects for 2024 aren't looking so hot.

FEWER SAFE HARBORS

Employees at other businesses should be appropriately alarmed that layoffs could also come their way. 

Already the prestigious niche of management consulting, based on outlooks posted on professional anonymous networks, has lost optimism about an early recovery from the punch-in-the-gut from the falloff in worldwide demand. There is speculation that the sector will downsize long term. No more golden ages. Although MBB (McKinsey, Boston Consulting Group, Bain) could be left standing they could be hollowed out. The value they supposedly deliver has become material for satire.  Once you become a joke, you're in serious trouble.

Similar darkness could overtake global legal services. In the UK, EY just conducted a layoff primarily affecting those in that niche and shuttered a whole unit focused on that area. The wariness should bleed into the rah-rah ethos of the recent salary raises at large US law firms. Today, Law.com puts out there that overall 2024 doesn't seem all-that-rosy for Big Law. 

Should associates even at current highflyers at Kirkland and Ellis, Paul Hastings and Paul, Weiss be feeling insecure about employment next year? The boost in salary, incoming more mouths to feed in the form of pricey summer interns and a possible recession could be difficult for the success stories of 2023 to absorb and still keep Profits Per Equity Partner high enough to prevent the star performers from bolting? 

The business of the large law firm operates, just like old-time Hollywood, on the names of the marquee. In what seems light years ago – 2021 – Paul, Weiss chair Brad Karp hammered that reality in a Bloomberg Law interview. Recently that firm made it its business to raise the wattage through three raids of Private Equity supertalent at Kirkland and Ellis’ London office.

Of course, so many other sectors such as media and human resources could be retrofitted by generative AI. Although new value could be created that could be at the cost of termination of human manpower. Also wage deflation often has taken hold for many of those still in the game. 

RETURN TO BUSINESS FUNDAMENTALS

Another point Spotify is making through this third layoff in a short time is the return to old-fashioned focus on actual profits, not potential growth. That's a reason why, despite an uptick in financial performance, it decided layoffs were necessary. Yes, boost profits.

At embryonic Amazon founder Jeff Bezos became famous for ignoring profits in order to build an empire. That evolved into the acceptable MO in tech. Much of investor activism is an outcry for more profit. That entails a pull-back from ESG issues to concentrate on the fundamentals of traditional business. This also throws shade on startups. They better do their slide decks to concentrate on soon there will be a profit. Here is my article in O'Dwyer Public Relations on the post-ESG era. 

COPING, NOT RANTING

In my coaching, clients are well aware of these shifts. There is no ranting about what should be in leadership or the job description. Instead, there is a search for tactics to cope with what is. That includes the potential for layoffs and firings via PIPs (Proposals for Improvement of Performance). To prevent their own financial collapse, they are creating multiple sources of income. Those extend from micro businesses to gig assignments.

SURPRISE – WHO’S IN CATBIRD SEAT

Those in the best position for 2024 could be the semi-retired. They potentially have the guaranteed income from Social Security, penalty-free access to their retirement savings, low-cost medical through Medicare and revenue from all kinds of hustles. 

Somehow, most have be able to embrace frugality. For example, there has been a migration of the semi-retired from HCOL locations such as California and New York to LCOL northeast Ohio. Lake Erie is a treasure. And an accessible one: There are no fees to get on the beach or to park. Lake Erie has become a symbol for Smart-After-60.

The semi-retired could be providing the template for how to age in America without becoming homeless. The message is this: Forget how you used to live. 

MAINTAINING INCOME FLOW, DUCKING NEW DEBT

Meanwhile for other categories of those working for income 2024 could require a total openness to how to ensure the continuation of money coming in. Don't be distracted by how any of that supposedly affects resume. You can take care of that later as you reinvent yourself.

Data or the gut for your careers and communications? Both of course. Complimentary consultation with intuitive coach, content-creator, and Tarot reader Jane Genova (text 203-468-8579, janegenova374@gmail.com).