Companies Should Give Close Consideration Before Layoffs

Pfeffer, J. (2010). Lay off the layoffs: Our overreliance on downsizing is killing workers, the economy—and even the bottom line. Retrieved February 14, 2010 from: http://www.newsweek.com/id/233131

This article, found on the Newsweek.com website, makes a case for firms to avoid layoffs because they generally do not save the company money and because the company’s productivity and financial performance suffers. Some firms have to have layoffs in order to survive and if a firm is in an industry that is permanently shrinking or disappearing, they may have no choice but to lay off employees. But the author states that many firms that are temporarily suffering because of the economy, may be better off keeping their employees intact. Some of the reasons given were that layoffs are expensive and hiring employees later is also expensive. Less obvious is that firms suffer from morale problems with the remaining employees and productivity per employee suffers as well. This is a good article for managers to read and understand because many company leaders feel that layoffs are the only means of dealing with downturns in the market and their business, but in many cases, the firm will end up in worse position.