Friday, February 13, 2009

Layoffs...what they say...

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Bad times bring out the best and worst in people... and it is also true for organizations...
While many companies use the bad economic scenario as an excuse to get rid of poor performers, it is also a fact that recession brings into open the problems with(in) the company ( operational issues, poor strategy...).

An article in Knowledge@Wharton titled 'Half a million job cuts: is there a strategy behind the layoffs?' makes a few interesting statements about the layoffs.

"Instead, they say, the job announcements highlight operational weaknesses and strategic issues that have been lurking under the surface for years. In the past, these were effectively concealed in the same way that weakness and instability in the capital system were hidden by the apparent boom in asset values. Now, the downturn has brought them to the forefront."

"the problem is that the crisis is forcing many managers to focus only on the short term. "At least in the U.S., companies don't seem to be thinking about much beside the immediate impact. To some extent, this could be because of the pressure to manage operations to conform to quarterly performance expectations. It could also result from the fact that the negative effects of layoffs -- such as the long-term costs associated with hiring again in upturns; delays in getting performance back up; and morale [issues] -- are hard to track. And it also may result from the implicit assumption that the workforce is really a just-in-time resource -- that it will be easy to bring in new workers when business picks up.'"

And here is the hard hitting truth.. "This means that, for many of the companies which have announced or will soon announce layoffs, the current economic crisis is not necessarily the cause of their problems; it is simply what has exposed them."

Do read the complete article. it does provide interesting insights and also the comments section is interesting...

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