Layoffs: A Long-Term Failure

Companies must try proven alternatives to layoffs

Photo by Vitaly Gariev on Unsplash

“People don’t pay attention to the evidence against layoffs. Perhaps it’s time that they do — and so consider the alternatives.” — Jeffrey Pfeffer, Greater Good Magazine

Organisational practices turn into standard operating procedures when when everybody starts implementing them, even if evidence points to their ineffectiveness.

Layoffs have become so common in the corporate sector that they have ceased to shock or surprise people. Layoffs are no longer part of a strategy; many companies do it simply because others are doing it.

This Greater Good Magazine article cites several studies that show that layoffs are a bad bargain in the long term. Most companies that reduced headcount did not experience any increase in profitability or productivity down the line. The stock prices either remained neutral or decreased.

The remaining employees were demoralised. Their commitment and job satisfaction declined. Overall, innovation waned and some companies even lost customers.

The laid off employees suffered ill-health, loss of self-esteem, and faced financial insecurity. Many died young.

Many organisations avoided layoffs during troubled times and proved that there were…