Layoff is the temporary suspension or permanent termination of employment of an employee or more commonly a group of employees for business reasons.
Employment termination - no matter the cause - is scary, disorienting, and disruptive to habitual patterns. Getting fired is never fun; layoffs are equally disheartening
Downsizing or doing layoffs is a toxic solution. Used sparingly and with planning downsizing can be an organizational lifesaver, but when layoffs are used repeatedly without a thoughtful strategy, downsizing can destroy an organization's effectiveness. How you treat people really matters - to the people who leave and the people who remain.
Reducing the workforce has become an automatic response for companies who need to cut costs to look good for Wall Street. Layoffs and downsizing are wrong. Layoffs are counter-productive. Layoffs should be a last resort, not a first choice for a skilled executive, says Management Guide, John Reh.
Layoffs are done to save money. Unfortunately, they are usually a short term fix, detrimental to the company. So why do so many companies persist in using layoffs as a first choice for cutting costs, and what are some of the alternatives
Sometimes things don't work out as forecast. Clients delay purchases. Suppliers raise prices. Competitors steal market share. Quarterly, at least in the US, companies have to face the forecasts they made. Public companies have to face Wall Street too. Investor don't like surprises. They don't value executives who miss their numbers. And they expect quick and strong action to addresses the issues.
Unfortunately, the very pressure to take action quickly ultimately works against their own best interest. Pressing for immediate action forces executives to cut costs, as opposed to raising income. Foolishly therefore, reducing the workforce has become an automatic response for companies who need to cut costs to look good for Wall Street. It's wrong. It's counter-productive. It should be a...