Technology giants, such as Meta, Microsoft, Google, and Intel, are currently carrying out cuts to their workforces in order to cope with global economic uncertainty. The companies making cuts know that laying off employees is an extreme measure that harms their image and can cause a crisis in relations with both outgoing and remaining workers. The most common form of downsizing is therefore a hiring freeze.
On the jobs site of Microsoft’s R&D center in Israel, for example, there are currently 26 vacancies. In July, the number was 40, and a few weeks before that it was 80. The new situation is making the tech giants change their interviewing procedures, in some cases creating tension between them and the job candidates.
On the face of it, all the global tech giants (except Meta) are continuing to interview people to some extent, the aim being to keep a large pool of candidates to whom offers can be made when the freeze ends, which in most cases will not be until early next year.
Hiring freezes often make employees angry. Although no cases have been reported of one of the tech giants cancelling a signed contract, the phenomenon is becoming more common in the industry in general.
“We are seeing a process familiar to us from past crises: withdrawal of pay offers already made to candidates because of jobs frozen or cancelled at the last minute,” Eyal Solomon, CEO of technology placement company Ethosia told “Globes”. “Since the beginning of September, the big companies, which generate 42% of the job vacancies in the industry, have on average frozen 65% of their vacancies. Of course there are jobs that remain open in order to find talents from competitors, and those with special requirements.”
According to Solomon, the sectors most prone to hiring freezes are software and Internet, with reductions in advertised jobs of 43% and 40% respectively, medical equipment, with 28%, cybersecurity, with 26%, and semiconductors and autotech, more conservative sectors, which have reduced job vacancies by just 11%. Industry-wide, altogether the market has lost 34% of the number of job vacancies that were open in January this year. The major companies alone have erased 29% of the jobs in the industry. All the numbers relate to the change in job numbers between January and October this year.
Adv. Limor Argov-Shenhav, a partner in the Litigation and Labor Laws Department at the law firm of Weksler Bregman, also reports a rising trend of employee hiring being halted at advanced stages. She says that few of the cancellations come after the pay offer or contract signing stages. “If the hiring of a worker is cancelled after the contract has been signed, that necessitates a hearing under the law of contracts. Even if there is written or recorded evidence of a commitment to the start of work or of the start of the process of drafting a contract, with the worker’s consent, here too the court could form the impression that there is a case of breach of contract.”
Cancellation of the recruitment of an employee after the stage of agreement in principle between the two sides is liable to exact a heavy price from the recruiting company if the Labor Court judge decides that there was a lack of good faith. Such a case arose at Dor Alon. In 2018, the regional Labor Court awarded damages of over NIS 100,000 to a worker whose employment was terminated without a hearing even before he had started work, covering loss of employment, lack of notice, welfare payments, and distress.
“In comparison with previous crises, when awareness of the right to a hearing was low and the exercise of that right was infrequent, this crisis presents an altogether different picture, especially among people aged 25 to 33,” says Solomon. “They demand to be able to exercise their rights, to raise claims after obtaining legal advice, and to ask for a probation period. They are starting to realize that competition in the market is tough and there isn’t necessarily a wealth of vacant jobs waiting for them outside. In addition, these days fewer people are afraid of reaching legal confrontations in order to enforce their rights.”
Published by Globes, Israel business news – en.globes.co.il – on October 27, 2022.
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