Workforce reduction comes one year after acquisition of rival Speedway
Another major employer in the United States has made layoffs ahead of a potential recession.
7-Eleven has eliminated about 880 corporate jobs in the U.S., CNBC reported. The Dallas-headquartered company’s Irving, TX and Enon, OH, support centers were impacted, as well as field support roles. The workforce reduction comes roughly one year after the convenience store chain completed its $21 billion acquisition of rival Speedway.
Read more: How HR should manage a buyout
“As with any merger, our integration approach includes assessing our combined organization structure,” a 7-Eleven spokesperson told CNBC. “The review was slowed by COVID-19, but is now complete, and we are finalizing the go-forward organization structure. These decisions have not been made lightly, and we are working to support impacted employees, including providing career transition services.”
7-Eleven operates more than 13,000 locations across North America, according to its parent company’s most recent annual filing. The company is owned by the Japanese retail conglomerate Seven & i Holdings, which was pressured by San Francisco-based investment company ValueAct Capital earlier this year to consider strategic alternatives following the merger, CNBC reported.
An anticipated recession has Silicon Valley trembling. More than 300 start-ups have laid off more than 50,000 workers since the start of the year, according to Layoffs.fyi, which tracks cuts in the tech industry.
Earlier this week, Bloomberg News reported that Apple plans to slow hiring and spending growth next year. Last week, Google told employees that it’ll be “slowing down the pace of hiring for the rest of the year,” according to an internal memo by CEO Sundar Pichai obtained by The Verge. Pichai said the Mountain View, CA-based company isn’t freezing hiring entirely; it’ll still hire for “engineering, technical and other critical roles.” But the pullback will mean “pausing development and re-deploying resources to higher priority areas,” according to the memo.
The memo came on the heels of Meta, formerly known as Facebook, giving engineering managers a deadline to identify anyone on their team who “needs support” and report them in an internal HR system, The Information reported. “If a direct report is coasting or is a low performer, they are not who we need; they are failing this company,” wrote Maher Saba, the company’s head of engineering. “As a manager, you cannot allow someone to be net neutral or negative for Meta.”
Earlier this month, Meta CEO Mark Zuckerberg told staffers during a companywide call that not everyone was meeting the Menlo Park, CA-based company’s standards and that some might want to leave voluntarily, Reuters reported. Zuckerberg added the company planned on reducing plans to hire engineers by at least 30% this year.
“If I had to bet, I’d say that this might be one of the worst downturns that we’ve seen in recent history,” Zuckerberg said. “Realistically, there are probably a bunch of people at the company who shouldn’t be here.”
Over the past couple months, JPMorgan Chase & Co., the biggest bank in the United States, and Coinbase, the biggest crypto currency exchange in the country, have both laid off hundreds of employees. Streaming giant Netflix followed suit, announcing its second round of cuts within two months. Tesla went one step further by closing its San Mateo, CA-based facility, laying off hundreds in the process. With the housing, crypto and tech markets all facing upheaval, more companies are expected to trim their workforce in the months to come.
Three out of four (78%) American workers are fearful they will lose their jobs, according to a survey from Insight Global, a national staffing services company. Meanwhile, 56% of American workers say they don't feel financially prepared for a recession or they don't know how they would prepare for a recession. More than half (54%) would be willing to take a pay cut, even with inflation at a 40-year high, to avoid being laid off if there were a recession.
“It's unfortunate we're already seeing some companies turn to mass layoffs because I believe layoffs should be the absolute last resort,” said Bert Bean, CEO of Insight Global. “Instead, I encourage leaders to consider other solutions, such as building a plan that avoids layoffs and helps you grow through a recession. Get your employee base executing on that, because when you bounce back from a recession, you'll need your people more than ever.”
Of course, HR leaders who experienced the global recession of 2008-2009 are better positioned to weather this potential storm. They’ve learned what works and business leaders will be turning to them to take the helm. As for HR professionals who are about to enter uncharted territory, this will be trial by fire.
“You never know how long these scenarios will last,” Jaemi Taylor, managing director in the HR practice of Allegis Partners, told HRD. Before joining the New York City-based executive search firm, Taylor spent nearly 20 years recruiting HR leaders, having worked for Robert Half, Beacon Hill and ChapmanCG.
“I’ve worked with HR leaders during COVID who asked the CEO or the board for more time, whether that’s a quarter or a month, before making drastic cuts,” Taylor says. “You want to review critical hiring, determine critical business initiatives and most importantly, avoid knee-jerk reactions.”
