Question

1) Provide an example (real-world or hypothetical) of a company which is growing yet at the same time laying off workers. How can we explain this? What may be some contributing factors? Describe a scenario where the company might reverse this action.

2) Describe three or more scenarios where a company would increase the quantity of labor resource (number of workers) it hires.

Answer 1

1. An example of such a company which is laying off workers can be any MultiNational Company in the Covid19 pandemic situation. We can take a real life example such as Cognizant which is doing both at the same time.

However here let us assume a company called ABC limited which is laying off workers because in this pandemic scenario, this is the only way out that companies feel that they can cut the costs structure and reorganise the organisation's strategies to get the work done. As the economy is facing an exceptional downturn in business transactions, output generated from these companies are getting reduced. As a result of this, they are resorting to temporary layoffs by retaining the best and most efficient workforce by the company.

The business downturn in activities due to the pandemic is definitely an important factor for this cause. Additionally the cost reducing strategy and the maximisation of capital minimising labour is also one way for which the company decides so.

The pandemic is not a permanent scenario and soon the economy is going to get a boost when things start getting back to normal. Thus at those times, the company would again need to hire more labour force to mitigate with the workload of the company.

2. Three more scenarios when the company hires labours are:

a. When the company faces an expansion of it's business wide across the world, it would need more labours to meet up with the work expectations and keep the company running.

b. When the company starts growing, it needs expertise on different fields and thus they hire separate workforce for building efficient capacity of the company.

c. When the company feels that the full time workers have a huge workload, some temporary workers are hired in order to fill the gap. In this way the cost can also be redistributed from the company's perspective.