Over recent months, tech companies have been laying workers off by the thousands. It is estimated that in 2022 alone, over 120,000 people have been dismissed from their job at some of the biggest players in tech — Meta, Amazon, Netflix, and soon Google — and smaller firms and startups as well. Announcements of cuts keep coming.

What explains why so many companies are laying large numbers of their workforce off? The answer is simple: copycat behavior, according to Jeffrey Pfeffer, a professor of organizational behavior at the Stanford Graduate School of Business.

Here, Stanford News talks to Pfeffer about how the workforce reductions that are happening across the tech industry are a result mostly of “social contagion:” Behavior spreads through a network as companies almost mindlessly copy what others are doing. When a few firms fire staff, others will probably follow suit. Most problematic, it’s a behavior that kills people: For example, research has shown that layoffs can increase the odds of suicide by two times or more.

Moreover, layoffs don’t work to improve company performance, Pfeffer adds. Academic studies have shown that time and time again, workplace reductions don’t do much for paring costs. Severance packages cost money, layoffs increase unemployment insurance rates, and cuts reduce workplace morale and productivity as remaining employees are left wondering, “Could I be fired too?”

For over four decades, Pfeffer has studied hiring and firing practices in companies across the world. He’s met with business leaders at some of the country’s top companies and their employees to learn what makes — and doesn’t make — effective, evidence-based management. His recent book Dying for a Paycheck looks at how management practices, including layoffs, are hurting, and in some cases, killing workers.

This interview has been edited for length and clarity.

Why are so many tech companies laying people off right now?

The tech industry layoffs are basically an instance of social contagion, in which companies imitate what others are doing. If you look for reasons for why companies do layoffs, the reason is that everybody else is doing it. Layoffs are the result of imitative behavior and are not particularly evidence-based.

I’ve had people say to me that they know layoffs are harmful to company well-being, let alone the well-being of employees, and don’t accomplish much, but everybody is doing layoffs and their board is asking why they aren’t doing layoffs also.

Do you think layoffs in tech are some indication of a tech bubble bursting or the company preparing for a recession?

Could there be a tech recession? Yes. Was there a bubble in valuations? Absolutely. Did Meta overhire? Probably. But is that why they are laying people off? Of course not. Meta has plenty of money. These companies are all making money.