Turns out layoff are bad for workers, the company and the economy. Consider this: SouthWest Airlines has never had an involuntary layoff in their 40 year history — and they are now the largest domestic US airline. Layoffs kill worker morale, erode loyalty, often lead to the best workers leaving with a loss of corporate memory. These negative effects linger long after the layoff event, even into periods of economic recovery. Conventional wisdom that they save the company money are also normally misplaced once all expenses, from payouts to departing workers to losses in productivity, are calculated. All this is not to say that companies don’t need to restructure periodically — it is just that management should be looking far enough ahead and watching current trends closely enough to know when conditions change. Reactive business strategy– like layoffs or across the board percentage cuts – is always too little, too late. Bad times reveals weakness.
Closing minds: How layoffs can be bad for business :: Spring 2008 :: Washington State Magazine
Workers whose jobs are in danger are less healthy and happy. That’s been common knowledge for years, says Probst. Countless studies have looked at job insecurity and its negative effects on employee health and morale. But businesses focused on the bottom line don’t really care about those results, she says.
The Case Against Layoffs: They Often Backfire – Newsweek.com
Our overreliance on downsizing is killing workers, the economy—and even the bottom line…Today the one airline that didn’t cut staff, Southwest, still has never
had an involuntary layoff in its almost 40-year history. It’s now the
largest domestic U.S. airline and has a market capitalization bigger
than all its domestic competitors combined.
Comments / ONE COMMENT
claudia snell added these pithy words on Feb 17 10 at 7:39 amGreat article. I’m glad to see this starting to be said. I have been saying for years that layoffs are generally a bad idea because they kill morale, scare consumers and hurt productivity. I’ve seen what they are describing at 4 different employers – massive layoffs have hurt, not helped, every single time.
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