Redundancies and Reductions in Tech: How to Manage Your Immigration Program

Technology companies continue to dominate news headlines regarding cost-cutting measures. Though many organizations have experienced substantial growth in the aftermath of the COVID-19 pandemic, the more recent global macroeconomic downturn has shone a light on tech companies’ costs and their lower-than-expected earnings for 2022 onwards. Add to that a potentially-looming recession and the continued cost of living crisis, and 2023 is continuing to forecast as a challenging year for all.

Introduction of Austerity Measures

With pressure mounting for executives and business leaders to stall the financial downturn in their companies, austerity measures have been introduced across industries in response to global inflationary pressures, excess workforce and business decline. This is especially prevalent within the fast-moving, fast-growing tech industries where hiring freezes initially occurred, followed by workforce reductions, salary cuts and site closures to drive down costs, to satisfy shareholders and to meet market needs. 

As a company bringing in these commercial measures, it is essential to understand the potential impact they can have on your employee population. Redundancies and reductions to your workforce can be a complex process whether in a start-up or an industry giant.  

The Role of Immigration Status

What happens to those employees who have an immigration status? What are strategies to best manage and support those individuals?

First, it is important to understand what an immigration status is. It is when an individual needs a right-to-work or live in their country of residence. For example, for a US national to obtain a right-to-work in Ireland, they might secure a Critical Skills Employment Permit or a South African national in Germany might obtain a Blue Card to work and live there. 

Certain immigration permissions tie employment to a company, as the company acts as the sponsor. Therefore, anything that could change the conditions of that immigration permission, such as a reduction in salary or voluntary redundancy, may result in an immigration action being needed. It could be a notification to the immigration office, it could be applying for brand-new immigration permission, or perhaps no immigration action is needed. The immigration activity needed will vary depending on permission and country. 

Some important immigration questions to ask yourself as an employer when faced with austerity measures that may impact your workforce:

• Who are my employees with an immigration status? 
• Do they have family members who also have an immigration status?
• What immigration action needs to happen? 
• When does the immigration action need to take place? 
• Who are the stakeholders involved in the business?
• How long should the austerity measure be in place?
• What is the impact of reversing the austerity measure (i.e., rehiring redundant roles, increasing decreased salaries, etc.)?

Considerations for Employers

It is important to consider these questions, and to conduct an in-depth review of your immigration program before taking any austerity steps. Otherwise, you may be faced with more challenging situations, such as immigration filings more expensive than the austerity savings or impacted employees in crisis as redundancy could lead to immediate departure from the country due to their immigration status.

2023 is expected to continue its trend of technology companies implementing cost-saving measures. However, with AI technology tools and national semiconductor strategies becoming key global topics, the technology sector could get a lifeline, and companies could be looking to walk back some workforce-reducing measures.

How would you manage your immigration program if re-hiring talent needed immigration actions? Looking at austerity measures and their impacts both in the short-term and long-term is important.

Need to know more?

Working with experts can help you navigate these challenging and complex immigration matters, as they can provide valuable guidance and support throughout the process, helping you make informed decisions that support your business goals. Always remaining fully compliant during a reduction in workforce exercise is critical.

Fragomen’s unique Immigration Programme Management group supports and delivers solutions for clients. For questions, please contact Senior Immigration Programme Manager Louise Collins at [email protected].

This blog was published on 29 June 2023, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please visit our dedicated COVID-19 site, subscribe to our alerts and follow us on LinkedIn, Twitter, Facebook and Instagram.