Layoffs are, as it turns out, not the answer.

There’s a great Newsweek article out now about the trend in downsizing, and how the layoffs are not saving the ship as once imagined. http://www.newsweek.com/id/233131

Sometimes people do need to be let go, and I think that if there’s a scientific and exhaustive measurement process to ascertain the job fit for the employees, a massive ‘rightsizing’ might be appropriate. If new skills are needed and the workforce isn’t keeping up (i.e. technology) or if the hiring process has been examined and found inadequate, there may be a real value in showing those who are fit for the jobs that quality counts.  This is something the article does not go into.

However, as the article very well explains,  layoffs don’t help the bottom line as much as assumed. I agree with the author’s argument, but wish there had been as good an explanation about alternatives to layoffs when money is tight.

Organizations still need to save money, especially when there are problems meeting payroll, and the article didn’t really address ways that leaders can really make the case for rejecting the layoff solution. If one chooses to refrain from letting people go, there need to be alternatives suggested.

I’m a big fan of layoff alternatives, not only because I was laid off after 9/11 as a result of the recession and our shrinking client base.  It was the third round of layoffs after the recession had started, and being in that situation is something I hope to never experience again. I think it informs my career choice more than most other experiences I’ve had.

In my case, I know that many of my coworkers may have agreed to take a pay cut and work fewer hours if it meant that we could keep working.  I don’t know anyone who has been furloughed in California, and I’m sure such a plan has it’s psychological downsides as well. But it sure beats the unemployment lines.  I’m going to look up some other alternatives and share what I find here.

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One Comment to “Layoffs are, as it turns out, not the answer.”

  1. Historically layoffs have almost never been the answer. Layoffs send the message to folks that they are on a sinking ship and instead of rallying towards productivity, people hunch in for “protectivity.” Employees are the ones who make money – and what better motivation to work harder than the knowledge that if you can work with others to increase profit that you will be financially rewarded.

    Of course this process needs to be incredibly transparent – if I take a pay cut at what point and under what circumstances will I be returned to by former status.

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