In recent months, large-scale technology companies have made news by cutting staff numbers. In some instances, including the waves of layoffs at Meta, the jobs lost have numbered in the thousands.

Leaders are cutting costs, whether by slimming down their headcounts, reallocating professionals across teams or cutting whole departments. This kind of movement naturally inspires questions — what's causing the layoffs? What skills and roles are companies focusing on going forward? And perhaps most importantly, how should these lessons and examples shape your own decision-making?

The ideal next steps for your company are unlikely to be like any other business's approach. In fact, you may find that the present moment isn’t the time or place for cutbacks at all. The key is to understand the currents powering the market and see how they apply to your unique situation.

What form are software engineering cutbacks taking?

Rather than one wave of change affecting the whole software engineering space, there are several types of movements taking place simultaneously. Depending on how they've spent the past few years of hiring and development, companies find themselves in a variety of different circumstances, and they're acting accordingly.

Some of the most common strategic moves seen across the industry at the moment include:

• Cutting headcount by function: This might mean reducing a team, such as quality assurance, project management or user interface design. The exact focus will depend on a company's expected needs in the immediate future.
• Cutting teams by product: By shifting focus away from one product, system or solution, a company can immediately reduce its overhead. Making such a move depends on the willingness to fully or partially shut down a major offering.
• Changing focus or philosophy: An organization may see the current moment as the perfect time to change the way it thinks about its leadership structure, for instance by removing layers of middle management or putting a heavier focus on agile operations.

The choice of which strategy to use comes down to a few factors. What kinds of products does the company want to produce going forward, and what does it envision as the best type of staffing to get it to that goal?

In many cases, companies are discovering that they don't have to reduce headcount at all to get their software development operations well-positioned for the future. In today's market, there is a strong correlation between company size and cutback plans.

Large organizations tend to be the ones making cuts today. These businesses may have over-hired in the past, taking on too many staff members at times when there was ample talent on the market. Such big companies are using a moment of financial reckoning and recessionary concern to right-size their teams.

Small companies, who may have been hiring strategically and intentionally all along, are largely not cutting software engineering headcount. Their objectives — and the strategies they're using to pursue them — are more consistent than large corporations' equivalents.

How can leaders reshape their engineering teams for success?

If you're planning to reshape your own software engineering team as a response to recent economic conditions, you need to come in with a plan. Smart revision of engineering team structures takes thought, and the mapping of possible unintended outcomes.

For example, what would happen if you cut your quality assurance (QA) team and made other employees pick up that work? While the intention could be streamlined processes with less overhead, the reality could be quite different. The lack of QA could cause bottlenecks in the deployment pipeline and lead to shortfalls in other parts of the workflow, as team members scramble to cover QA responsibilities.

The ideal strategy for today's companies often involves speed through quality.

This is a marked difference from a "speed over quality" mindset that slashes QA in the hopes of going faster. Reliable engineering workflows deliver speed and efficiency by requiring less clean-up work or fixing preventable mistakes.

Innovations, such as automation usage, infrastructure-as-code development and DevOps structures, can deliver results for software engineering teams. It should be noted that to make these methods have their maximum effect, you should make sure there is good leadership in place. "Good leadership" today means people who can deliver the value you seek, rather than simply being a synonym for "tenured leadership."

Which metrics indicate whether engineering department changes are working?

Measurement is the heart of strategy adjustment. It's important for you to have solid, accurate metrics to determine whether your approach to cutbacks or reassignments is working. This data should be updated in real-time, so you'll be warned away from unsuitable strategies before the bottom line suffers.

The guiding principle for all your software leadership and staffing decisions should be following business objectives, rather than being too caught up solely in internal department metrics. Engineering teams' purpose is to further the overall goals of the company, and adjustments to staff levels should also play into the pursuit of greater objectives.

A problematic trend among companies reducing staffing today is to make cuts until they start to fall short of their corporate goals. This approach, stress-testing the business to see what it can withstand, tends to drive a cycle of stress on remaining employees and hurt the organization in the long run.

Using both your own metrics and companywide numbers should help you with measuring the balance of savings vs. consequences as a result of your changes. If the results demonstrate that your initial strategy isn't having the intended results, you should be prepared to change tactics quickly and decisively.

What does the future of software engineering look like?

Making adjustments to staffing today means preparing for the future, rather than just dealing with the present. It’s important to remember this while cutting or reassigning employees, because the next few years could be a highly tumultuous time for software engineering.

The labor market is currently being flooded with engineers. Whether you will find yourself needing the assistance of extra engineering headcount in the years ahead will differ depending on your industry and objectives, but it's worth considering whether it's wise to add employees rather than cutting.

It should be noted that while the labor market is filling up with engineers, not every one of these prospects has the same balance of skills and specialties. Adding people just to add them is the kind of thinking that led large companies to need cuts in the first place.

Fast-moving factors of demand will drive the future of the software engineering field. However, these factors are impossible to predict with 100% accuracy, so you'll need to keep your plans flexible when determining whether to cut or hire.

Priorities could shift as a result of:

• Increasing development in emerging areas, such as augmented reality (AR) and virtual reality (VR), changing companies' approach to user interface development, among other tasks.
• Greater use of artificial intelligence (AI) as a coding tool, which prioritizes strategic thinking and takes some of the importance off of rote code writing.
• Evolving geopolitical relationships, as companies rethink their partnerships and target markets as a result.

It will be challenging to create a software engineering staff strategy that meets tomorrow's needs, but it's necessary from a leadership perspective.

How can a consulting engagement help leaders run more efficient software engineering teams?

When you're creating strategies to cope with software engineering in turbulent times, you have an extra tool at your disposal: assistance from external consultants. These experts are trained to meet a variety of demands in a wide range of situations, and can help your organization in a few distinct ways.

Consultants' impact on your business could entail:

• Adding capacity to meet peaks of demand: When you encounter high-demand situations, you may be tempted to add employee headcount. That approach could lead to a repeated cycle of over-hiring and engaging in layoffs. Consultants can circumvent the process, only contributing their skills when they're most needed.
• Introducing new methods, processes and structures: You don't always have to bring in external subject matter experts to provide short-term, hands-on capacity. Instead, you can use them as thought leaders and collaborate with these consultants to craft your strategy for the future. By applying best practices, these personnel can create sustainable outcomes.

A few unique strategies can counter staffing challenges. While permanently cutting headcount and changing departmental structures are among your options, you should also consider the extra possibilities that come from consultants.

What's the value of working with Transcenda's experts?

Working with consultants on high-profile software engineering changes is only a suitable approach if you team up with the best people in the business. This is where Transcenda comes in.

Using expertise and best practices to keep your operations on track, Transcenda's consultants can work with your team on a project-focused basis or an open-ended contract — depending on how you envision their role. Introducing high-quality processes to your workflows can make our experts’ impact felt beyond their direct, hands-on work.

To see if a targeted consulting engagement could help your organization avoid the pain that sometimes afflicts companies at times of marketwide stress and change, reach out to Transcenda today.