Question

If you are the Chief Executive Officer of a successful organization and the shareholders tell you in order increase the profits by another $260M over forecast, you need to layoffs 9 people. What will you do? Explain the pros and cons of your actions for a. yourself, b. employees, and c. shareholders.

Write (typed) 2-3 good paragraphs about it and it should be in favor of layoffs. Thank you

Answer 1

PROS :-

1. Keeping Experienced Workers

Laying off workers on the basis of seniority allows you to keep your most experienced workers

2. Showing Employee Loyalty

As a business owner, how you treat your employees is just as important as how much money your company makes. Laying off workers on the basis of seniority shows your workforce a sense of loyalty. You are rewarding the employees who have stayed with your company the longest and remained loyal to your company when these workers could've easily found employment elsewhere.

3. Limiting Improvements

Layoffs based solely on seniority may not eliminate drags on your workforce's performance and may actually aggravate poor productivity. This occurs because your company's layoff strategy does not consider individual worker performance. A new employee could easily outpace a more experienced worker in productivity, but the experienced worker knows he doesn't need to work hard to keep his job.

4. Keeping Highly Paid Workers

If your company is experiencing a budget crisis, laying off workers on the basis of seniority won't help reduce your costs by a significant amount. This is because your experienced workers usually receive higher wages than newer employees. Keeping these higher-paid employees can create cascading problems for your business resulting from a dip in productivity, which leads to lower revenue, which places a greater burden on your available resources because you have no choice but to continue paying employee wages.

CONS :-

1. Legal Risks

Massive layoffs can lead to legal problems and costs if your business does not plan well for the event. The Worker Adjustment and Retraining Notification Act mandates that layoffs of 100 or more employees include a 60-day advance notice. You also face potential discrimination lawsuits if your layoffs are not supported by solid data to support the financial benefits. Lawsuit settlements or defense of legal claims can get expensive.

2. Lower Morale

Low morale in the workplace after layoffs can significantly diminish post-layoff production. Employees may feel briefly happy to retain their own jobs, but the emotional toll of losing close colleagues and fears about the potential for more layoffs weigh on people. Without effective post-layoff coaching, communication and management, these concerns will fester. Employees forced to take on work of lost colleagues may also feel overwhelmed by expanded job roles.

3. Distrust

Layoffs, especially when they come out of the blue, can create a sense of distrust from employees toward top management. They may feel like leadership didn't do enough to put the company in a good position or to manage costs well enough to avoid job cuts. Again, the process significantly impacts the potential for distrust. When employees are not well-informed about the reasons for layoffs, they more likely feel left out or deceived.

4. Negative Business Impact

Layoffs are intended to lower costs, but detractors note that the common financial implications are often more negative than positive. Laying off workers in important sales, service or operational roles limits your production and proficiency in these areas. Cutting workers in sales and service areas when you are struggling to get business can be contradictory to your needs. You put more challenges on the remaining workers in these areas, even though they already have difficulty attracting and retaining customers. Too few workers to manage customer relationships leads to sour customers and sinking profits