Massive layoffs have become a hallmark of the Covid-19 pandemic. While some companies are hiring heavily, layoffs in the U.S. now number in the millions. The latest casualty in the layoff crisis is California-based recruitment site ZipRecruiter, which has furloughed or laid off almost 500 employees — more than one-third of its staff.
The company announced the cuts on Friday. Affected employees will receive one month of severance, three months of company-paid healthcare insurance coverage and a two-year extension to exercise equity.
Furloughs and layoffs are slightly different, according to the Society for Human Resource Management. Furloughed employees may experience shortened hours, forced unpaid leave or unpaid time off. Layoffs are a temporary separations from payroll, with the possibility of a recall if the employer’s economic circumstances change. A reduction in force, or a redundancy in U.K. parlance, is a termination from employment without the likelihood of re-employment.
ZipRecruiter slashed its monthly marketing budget and overall expenses by $10 million, Dot-LA reported. CEO Ian Siegel and his three co-founders took a 50% salary reduction, while other executives also took pay cuts.
“[There has been] a pronounced reduction in hiring activity over the past couple weeks,” the company said. “As a result of this decline in economic activity, ZipRecruiter came to the difficult decision to furlough or lay off 492 employees (39% of total headcount) on Friday. These actions are in no way a reflection of the incredible contributions these valued team members made to ZipRecruiter.”
Other recruitment marketing companies, including former market leaders Monster.com and CareerBuilder.com, may also lay off staff soon, said industry blogger Chris Russell. However, Indeed, the leading global recruitment site, “may be able to weather the storm better than others” because it is owned by Recruit Holdings. The Japanese multinational staffing and recruitment company has a diverse portfolio of investments that it may be able to fall back on.
“As the economy goes, so does the success of job boards,” Russell wrote. “The vast majority of employers have frozen hiring or have begun to furlough or layoff staff. This is going to be the norm for at least a few months as the virus hasn’t peaked yet in the U.S.”
