Global job cuts and Bangladesh

In the second week of August, five companies in the United States (US) and United Kingdom (UK) announced plans to slash a total of 7,000 jobs. The companies include the global biotechnology firm CSL, the globally renowned LG Electronics, the US-based and internationally recognised tractor and farm equipment maker John Deere, the Japanese advertising agency Dentsu Group, and the US-based healthcare company CentraCare.

On their own, these numbers may seem paltry. However, these five are latest additions to the growing list of more than 3,100 companies globally who announced mass layoffs since the beginning of January this year.

The layoffs suggest a paradigm shift in hiring and are being done by senior managements of these companies to restructure their organisations, thus making these more future-ready and in some cases, more profitable. While the wave of layoffs has also reached our economy, strategic and timely steps by the government could ensure that the ripple effect from these do not create havoc in our economy that is still recovering from the aftermath of events of the past 16 years.

According to FastCompany, as many as 800,000 jobs were axed by companies in different sectors globally between January and July this year. The lay-offs are prevalent in a specific group of sectors. Leading the list is the technology sector, where Intel has announced that they will cut 21,000 jobs or nearly 20 per cent of their global workforce. Microsoft has already cut 13,500 till July, Meta has let go of 3,600 employees and Tata Consultancy Services India has cut 12,000 jobs. The other names that have announced lay-offs and furloughs in 2025 include Amazon, Google, CrowdStrike, Bumble and others.

The other sectors trailing behind technology include the automotive industry, retail & e-commerce, government departments (US federal agencies, United Nations, USPS and others), healthcare, energy & utilities, financial services, aviation & logistics and manufacturing.

As such, the US is leading the pack of countries hit by the layoffs with nearly 257,000 jobs being slashed. Out of the total, more than 171,000 federal employees were laid off due to budget cuts and restructuring, while 64,000 jobs were lost in the retail sector following major bankruptcies of companies such as Joann Fabrics, Party City, and Big Lots.

The other countries hit by lay-offs include Japan, Vietnam, Argentina, Pakistan, Indonesia, India, UK, Germany and more.

Some reasons behind the layoffs are straightforward. For example, the federal agency layoffs in the US occurred due to the Trump administration's government spending cuts. Also, companies began to downsize across the globe following tariffs imposed on them by the Trump administration. The tariffs have reduced profitability forcing companies in several countries to downsize.

One of the biggest reasons behind the layoffs is the introduction of Artificial Intelligence. According to a survey by the World Economic Forum, some 41 per cent of companies worldwide expect to reduce their workforces over the next five years because of the rise of artificial intelligence.

The other reasons behind the job cuts include post-pandemic economic adjustments and political and policy transitions in most countries.

Fortunately, Bangladesh is yet to be affected by such restructuring of multinationals. There are rumours of silent layoffs occurring in some software and Business Process Outsourcing (BPO) companies. Software developing companies are facing the brunt, as many of their clients are large Western companies currently announcing layoffs in their direct workforce.

Some financial experts have dreaded that these downsizing measures in the Western countries will significantly hamper the lifestyles of the middle-income households in those countries. As these households are mostly consumers of goods like readymade garments, sweaters, frozen foods, perishable goods and other products, the export sectors of Bangladesh may see a decline in orders this year.

In reality, that has not happened. On the flip side, a lower 15 per cent tariff by the US might even push orders from other countries to Bangladesh's export sector.

Bangladesh could add to this trend by appealing to big brands that are moving jobs from Europe and North America to Asian countries. For example, Intel is downsizing its workforce in Europe and moving these jobs to Vietnam and Indonesia. If Bangladesh can convince companies like Intel and others about the lower costs of productions here, some of them may be interested to invest. 

However, there are other areas where Bangladesh needs to improve like rapidly cutting down on the time it takes for a foreign company to open an entity in Bangladesh, ensuring uninterrupted access to utilities and internet as well as a politically stable economy.

For the last part, Bangladesh could learn a thing or two about the importance of political and economic stability from Pakistan. A Who's Who of the biggest names including Microsoft, Careem, Total, Uber, Shell and others have left Pakistan citing economic challenges and strategic shifts.

While Information and Technology sector in Bangladesh is feeling a bit of the layoff breeze, the Bangladesh government could play its part by announcing incentives for these companies. There could be a collaborative effort between the telecom and IT companies and the government to train Bangladeshi IT professionals in various fields of Artificial Intelligence.

Only by staying informed about latest changes and taking pre-emptive steps, Bangladesh could turn its threats into opportunities in the coming years when AI and related emerging technologies will dictate the prosperity of economies.

Syed Tashfin Chowdhury is a communications professional. tashfinster@gmail.com