There’s no gracious way to do layoffs; letter, email, Zoom meeting, conference room—any method is likely to be devastating for workers. As the market tightens, some areas in finance are being hit harder by job cuts than others, experts told CFO Brew.
Layoffs have happened across sectors, from tech and media to banking, leaving many to worry about their own job security. Within specific companies—such as Boeing and Stanley Black & Decker—finance functions have also seen cuts.
Banks such as Credit Suisse, Goldman Sachs, Morgan Stanley, and Bank of New York Mellon had begun cutting more than 15,000 jobs, along with extras like bonuses and luxuries such as private jets, the Financial Times reported in January. And banks have reportedly cut jobs in investment banking and mortgage lending as well.
Jim Lawson, managing director and co-leader of leadership advisory firm Russell Reynolds Associates’ global financial officers practice, told CFO Brew that, on a wider scale, business units seem to be consolidating right now, which is leading to layoffs of finance leaders in segments like divisional products or regional focus areas.
“Division CFOs, business unit CFOs, regional CFOs are being displaced because of cost,” Lawson said.
I’d like to connect. Finance professionals have leaned on their LinkedIn networks to help find new roles. Last month, Twilio, a customer engagement software firm, laid off 1,500 workers or about 17% of its workforce including people from the finance team. Among those laid off, according to LinkedIn posts, were a finance director who led a group of FP&A managers and a senior financial systems analyst.
At Truepill, a consumer-facing healthcare software company, senior finance analyst, senior business intelligence engineers-slash-analysts, senior accountants, and accounting managers were among the finance roles cut in September, according to a LinkedIn post from its (now-former) VP of finance and FP&A.
“We downsized the majority of the finance functions,” Leticia Esteve, previously VP of finance and FP&A at Truepill, told CFO Brew, adding that while accounting was less impacted by layoffs, the finance growth, corporate development, and FP&A segments saw the largest reductions.
Esteve’s observation that accounting was less affected by layoffs is also what finance recruiters seem to be finding; Hailey Eklund, director of recruiting, accounting, and finance at staffing firm Sayva Solutions, told CFO Brew that clients are “demanding resources” at the senior accountant and manager levels in general accounting. But she said there has also been a consistent demand for technical accountants and accounting research experts.
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“Given the shortage of highly qualified accountants, especially those with public company and/or public accounting backgrounds, the hiring market has remained strong,” Eklund told CFO Brew, adding that when people in highly sought-after accounting professional roles are laid off, they tend to land new jobs quickly.
But, that’s not to say that layoffs are as widespread as they may appear; Eklund said that she has “not seen a significant uptick in layoffs yet” and has mostly seen them with companies that recently filed Chapter 11 bankruptcy or have “previously relied on funding to continue operations.”
Miya Shitama, PR at Twilio, told us that it does not comment on “any individual’s employment” and pointed us to its blog post. Truepill declined to confirm which positions had been impacted by layoffs.
One area of finance that appears to have been spared from the cuts is ESG, or environmental, social, and governance finance roles. ESG has fallen under the purview of the finance department at many organizations, as companies await looming SEC regulations. That’s created a desire for finance professionals who can report on a company’s ESG topics, such as carbon emissions and DE&I metrics.
And, despite some recent anti-ESG backlash among investors, the sector has not experienced widespread layoffs, according to research from Barclays.
Prepare to lay yourself off. Financial planning and analysis, also known as FP&A, is often the first team to run the numbers behind who and how many employees should be laid off, CFO Brew reported last fall, but that doesn’t mean they’re safe from cuts themselves, as evidenced by the recent layoffs at Twilio and Truepill.
The layoffs appear to be wide, and, in some companies, deep, affecting more than 15% of the workforce. Although it’s fair to think that companies laying off 5%–7% of their workforces could just be trying to reduce headcount after over-hiring during the first few years of the pandemic.
CFOs may find themselves caught among their executive peers and with those who are being asked to lay workers off, Lawson said.
“During times of growth, the CFO sometimes has to quiet down a little bit relative to rein in costs. But when the market flips, the CFOs now [is] the voice of reality to where the market is currently, and that creates tension in the C-suite,” Lawson said.—KT