Impact of

layoffs at work

ADITI ANAND

MBA- FINANCE

STUDENT –AMITY UNIVERSITY, NOIDA

 TABLE OF CONTENTS

SR.NO. TOPIC PAGE NO.

1 ABSTRACT 1

2 INTRODUCTION 2

3 IMPACT OF LAYOFFS 3

4 CONCLUSION 4

5 BIBLOGRAPHY 5
 ABSTRACT

A layoff is the temporary suspension or permanent termination of employment of

an employee or, more commonly, a group of employees for business reasons, such as personnel
management or downsizing an organization. 
 INTRODUCTION

A layoff describes the act of an employer suspending or terminating a worker, either temporarily
or permanently, for reasons other than an employee's actual performance. A layoff is not the
same thing as an outright firing, which may result from worker inefficiency, malfeasance, or
breach of duty. Layoffs may happen for a variety of reasons that may affect an individual or a
group of workers, in both the public and private sectors. Generally, layoffs are conducted to
reduce salary expenditures, in an effort to increase shareholder value. Layoffs may occur when
an employer's strategic business objectives or processes change, in the face of declining revenue,
the adoption of automation, or the offshoring or outsourcing.
 IMPACT OF LAYOFFS

Have you ever thought about how this layoff will impact an organization? What do you think, if
only one employee is laid-off from the organization?

1. The Emotional Impact

It is no surprise that stress-related illnesses were 50 percent higher in the
companies that had downsized their workforce compared with those companies
that had not undergone downsizing. With the high number of individuals being
laid off from their jobs and the relative unavailability of similar job openings,
people are left without adequate income for extended periods of time, resorting
to very different and frequently lower-paying jobs, resulting in higher levels of
stress and more health symptoms.

2. Financial and Familial

the financial implications of layoffs, the lifestyle changes people have made,
including reduction of savings and the sale of stock and other property by
individuals to cope with the loss of their income. Many individuals describe the
changes in their earlier lifestyle and a greater impact on their social life as
additional consequences of layoffs. This stems from parents experiencing
financial challenges that lead to heightened states of anxiety, depression,
behavior problems and poorer peer relationships in kids.

3. Break-off Customer Relationship: Layoff destroys many strong relationships, which are

not easy to re-build again. Imagine you receive orders from senior-level management to
layoff an employee who is very good at his job but he is not equal to your level or senior-
level management staff. As you don’t have any other option you will lay him off as per
the orders. This might break the relationship with the employee.

4. Does Not Save Cost: What is the main reason for layoffs in an organization? Saving
money is the main reason for the layoff in most cases. In fact, when a company gets stable
and starts growing again, there will be an increase in workloads. If the workload increases
the employer has no option but to hire new employees.
The search for new talents comes with a cost. The company faces like the process of
interview, hiring, and training. Moreover, it is too tough to find the right person for the
right job. At this critical stage, many companies might feel layoff was an option, but it
should be taken after careful consideration.
 CONCLUSION

Many companies might feel layoff was an option, but it should be taken after careful
consideration. It is so strange that when an employee is part of the company or when he is hired,
the employer says “An employee is a valuable asset to an organization.” However, suddenly in a
period of crisis, it changes to “An employee is a liability to an organization.”

“Most companies that go through layoffs are never the same. They don’t recover because trust is
broken. And if you’re not honest at the point where you’re breaking trust anyway, you will never
recover.” — Ben Horowitz
 BIBLOGRAPHY

1. Hamline.edu
2. Medium.com
3. wikipedia