Tech layoffs begin: What companies can do to isolate themselves

By Vlad Gozman, Serial Entrepreneur and Founder & CEO of involve.me. Follow @vladgozman on Twitter.

As the effects of Federal Reserve policy continue to be felt, it is becoming clear that the tech industry is not immune to a major economic downturn. We've already seen tens of thousands of layoff announcements from companies such as Google and Facebook, and I think the likelihood of further sluggishness in the industry remains high.

This echoes past recessions, when the so-called "core" sectors were hit the hardest. Many compare the current climate to that of 2000, when the dotcom bubble burst and tech companies were the first to lay off.

However, many leading analysts predict greater economic difficulties ahead. In fact, Bloomberg analysts see a 100% chance of a US recession within a year.

Companies that circumvent layoffs are more likely to succeed.

Fortunately, technology leaders have options to help them weather the storm without significant job cuts. We can look back to the dot-com crash of 2000 to find lessons on how best to prepare for a potential downturn.

The companies that stood out during the dot-com crash were the ones that kept their key employees. An article in Harvard Business Review points out that companies listed in stock market with few-to-no layoffs "posted increases of 9% in share price, on average", while "the share price remained stable in companies that laid off 3% to 10% of their employees. Companies that laid off 10% or more of their employees suffered a shocking 38% drop in stock price.

These findings apply to today's technology companies. What executives should take away from the dot-com meltdown is that cutting costs with layoffs may make sense from an immediate cash flow perspective, but it's only one solution to short-term and involves long-term risks. Companies that avoid layoffs are more likely to succeed in the long run.

Think of the recent firing of Elon Musk on Twitter. These actions, although instituted as a cost-saving measure, have given rise to lawsuits,