What are the reasons of Lay Off?

1. Cost Cutting
The global economic meltdown has significantly affected business operations. The last
decade alone has been a testament to a great number of companies that have filed for
bankruptcy. There is little to no scope for the growth of business under prevailing
circumstances. In such a scenario, the only sustainable solution for any company is to let go
of a segment of its employees. Since the revenue cannot be substantially increased, the only
viable option is to reduce cost.

2. Change in Policies
The current US President, Donald Trump, has made serious changes in the international trade
and business policies of America. These policies are focused on job creation within the US.
This, in turn, has drastically affected third party vendors in other countries, like India and
which cater to the needs of companies in the US. After the US economic crisis, a lot of
companies have opted for mergers and buyouts. During such corporate spin-offs, a sizeable
number of redundant or excessive employees are booted out of the newly-formed
organization.

3. More supply than demand

India has the largest number of young people in the world, adding nearly 10 million new
workers to the workforce annually. That’s equivalent to roughly the entire population of the
Czech Republic or Portugal. A 2014 study expects India to create just 38 million non-
agricultural jobs between 2011 and 2019. The number of workers seeking jobs far outstrips
supply of jobs.

4. Other Miscellaneous Factors

Layoffs in corporate giants are a matter of serious concern, and there are many miscellaneous
factors which also contribute in shifting the dynamics of the job market. A number of small
factors collectively cause a snowball effect. For instance, reduction in business opportunities
leading to termination of projects, companies relocating to more cost effective locations, etc.
impact the employees in the same way. Technological prowess is also contributing to the
threat of mass retrenchment. Advanced research and development in Robotics is a new
frontier which could also potentially change the employment landscape as human
intervention will become redundant on several fronts.

5. No sunrise sectors
Unlike in the past, when one sector matured and faded in its hiring buoyancy, new sunrise
sectors took its place, absorbing and retraining workers. For example, after IT services came
telecom and organised retail. Now, at least so far, there is a virtual absence of sunrise sectors
that hold out hope for job seekers.
The article has described seven practices he said are found in most successful organizations
(based on research in a wide range of industries in more than 20 countries):

Provide employee Security:

Employees surely can be fired if they do not perform, but they should not be put on the street
quickly because of economic downturns or strategic errors by senior management over which
they have no control. An example he frequently cites is Southwest Airlines, which sees job
security as a vital tool for building employee partnership and argues that short-term layoffs
would "put our best assets, our people, in the arms of the competition. When employee will
not be give security he would feel embarrassed and perform not up to the mark that would
certainly result in financial performance. To provide security is what we call in organisation
is job security and good work environ meant.

Selective Hiring:
Organisation will have its first mark being setup if they recruit right people in right job.
Southwest Airlines received many job applications and approve only small numbers. Second
the organisation needs to be clear regarding critical skills and attributes of applicant.
Different question are asked according to attributes the organisation wants to have in
applicant. Third the people hired for sales or any particular job must have skills not any
academic performance, it ultimately have to be the person who is suitable for specific work.
Fourth, companies should screen for cultural fit and attitude, among other things, rather than
just for skills that new employees can easily acquire through training.

Self-Managed Teams and Decentralization as basic element of

organisational design

Teams can substitute peer-based control of work for hierarchical control, thereby allowing for
the elimination of management layers. This can give the sense of responsibility and
empowerment which results in people for having them accountable. It would lower the cost
of having unnecessary job tasks people performing. Intelligent organisation is one having
communicative view, i.e. involving employees in decisions and objectives of the organisation
rather having some specific people to be bureaucratic and hierarchical. Whole Foods Market
works as team member and objective is shared among all the employees. Such Teams help
each other on production, knowledge and trading tricks. Self-managed team as another
example that Vancom(A Thailand based company) has only one manager sees work of forty
drivers and all share information, and they are more in responsibility on road. If anything
goes wrong they report it and get it right, that is the reason for success.

Comparatively High Compensation Contingent on Organisational

Performance.
High pay can produce economic success, as illustrated by the story of Pathmark. This large
grocery store chain in the Eastern United States had three months to turn the company around
or go bust. The new boss increased the salaries of his store managers by 40 percent to 50
percent, enabling them to concentrate on improving performance rather than complaining
about their pay. Home Depot has been successful for the reason being that they pay much
more for retail industry. Another example says that when employees are owners, they act and
think like owners and they feel more responsible and it do generates results.

Extensive Training: Some organisation do some sort of return-on-investment

calculations, but concludes that such analyses are difficult, if not impossible, to carry out.
Successful companies that emphasize training do so almost as a matter of faith. Training is an
essential component of high performance work systems. The Men’s Warehouse, an off price
speciality retailer of men’s tailored business has built its 35000 square foot training centre in
Fremont California that lead the company to increased its value of stock by 400 percent,
because people are being invested and their return would ultimately going to be shown.
Motorola could not evaluate the increase in performance but they had invested around $170
million in training but it should be evaluated in management process rather any other
calculations.

Reduction of Status Differences: These include dress, language, office arrangements,

parking and wage differentials. In order to make organisational members feel important and
committed they reduce the status distinctions, it is done in way through language and labels,
physical space and dress. At NUMMI (An Automobile manufacturing company owned by
General Motors and Toyota) everyone wears the same coloured clothes, parking did not exist.
Some organisation did not have private secretaries, to reduce status differences. Herb
Kelleher agreed to freeze his salary at specific amount and nominated for best CEO. He was
not poor because he had owned stock in his company and that contributed to all other
members.

Sharing Information: The chief executive of Whole Foods Market has said that a high-
trust organization cannot have secrets. His company actually shares salary information with
every employee who is interested. Organisational performance could not enhance if trained
people do not have information on important dimensions, and training on how to interpret
that information. SRC (Springfield Remanufacturing Corporation) started open book
management where all employees shared information that had certainly lead to success of
company. When company has lost its order, even then the company people shared
information and improved sales.

It is not easy. I used the term it is not easy because if all these organisation has been
successful then there has to be certain policies which is being reviewed in article. If it would
have been possible then southwest gets copied and applies the same formula but that did not
work. There has been some problem implementing these ideas.
Managers are enslaved by short term pressure like organisation needs long time to change its
culture. Secondly organisation wants shareholder value in short time but there needs to be
much time to evaluate. Third managers put all efforts on bottom line manager and when there
is time for result then position is being changed.
Organisation tends to destroy Competence because organisation often inadvertently destroy
wisdom and competence or make it impossible for wisdom, knowledge to benefit the firm.
Managers do not delegate enough, if manager feels his superiority then result is according to
it as more oversight result to more performance and less on less. In some organisation there
are some norms and culture that results in good organisation performance. Although little
evidence exists that being a mean or tough boss is key to success so some organisation do
follows this notion.
There are different chance for success and that all depends on how manager looks it to be,
whether good or bad all depends on manager perspective. He is the person who judges for
decisions and employee career and organisation success.