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The Inconvenient Truth About Corporate Layoffs

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The Inconvenient Truth About Corporate Layoffs

All firms of all sizes, end up laying some people off. Somewhere between 55,000 and 57,000 people get laid off every day globally, per research. This happens for many reasons:

  • Performance Issues
  • Revenue Erosion
  • Mergers
  • Restructuring
     

This article is about corporate layoffs that occur on a larger scale. You know, the ones that conveniently happen around the holidays and the new year? Who does that?!?  And about timing, let’s explore that.

The theory is: company X had a growth target (say, 12 percent) and they were only at 10 percent. If they lay people off and strike those salaries from the books, they’ll hit their mark for the year. The problem is, most research on layoffs shows it doesn’t really have short- or long-term benefits. You might hit your 12 percent growth goal, but now the rest of the staff is massively overtaxed trying to hit next year’s 15 percent goal. It becomes a deadly cycle. So whenever you are considering laying people off, look beyond the goal or the quarter. Think about the cycle you will create.

Also, rumors and rumblings of layoffs in a company usually spike turnover, because your employees get scared and feel they have no choice but to look into other options.

Sidebar

Am I the only one who feels like companies have the WORST explanations for why they have to layoff a percentage of their workforce? Ever heard any of these excuses?

  • “We need to uncover opportunities to increase effectiveness.” Huh?
  • “It would be a solid play to reduce redundancy.” What?
  • “Some processes need to be re-engineered.” Yo no comprendo.
  • “Spans of control should be considered and adjusted.” Come again?
     

My favorite is when you get a generic letter with a canned reason for why your services are no longer needed. Tough.

The Problem: How Layoffs Happen

The problem with layoffs is not that they happen — rather, the problem is in how they happen.

Layoffs are impersonal at best. A “high-touch” rather than “low-touch” approach is ideal. At worst, you could describe a lot of layoffs as inhumane and even degrading. I’ve worked with over one thousand professionals who came to me for guidance after being laid off (that was back in my career development days), and their entire identities were crushed, not because they no longer had jobs, but because of the traumatic experience they endured around getting laid off.

To add insult to injury, many organizations don’t like doing layoffs themselves. They don’t want the  “blood on their hands”, so they bring in third-party consultants to do the dirty work. If you’ve ever seen the movie Up In The Air with George Clooney (there’s also a book), that’s what it’s about. I can’t imagine firing people for a living, but some people make a lot of money doing it.

The bottom line remains. Companies must do a better job when it comes to create a layoff process that preserves the dignity of employees during this very tough transition. I have a few ideas on how companies can make that happen.

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