Even as layoffs climb near historic highs, some companies are working hard to hold on to their workforce, said Matt Richtel in The New York Times. Instead of saving money by slashing jobs, they’re doing it by reducing salaries or mandating time off. Dell asked employees to take an extended unpaid holiday. Cisco implemented a four-day shutdown. Motorola asked staff to take salary cuts. Other employers are shifting to four-day workweeks and trimming benefits. “Companies taking nips and tucks to their workforce say this economy plunged so quickly in October that they do not want to prune too much should it just as suddenly roar back.”
Layoffs are often seen as a “useful part of the business cycle” because they “weed out” underperformers, said Cari Tuna in The Wall Street Journal. “Some people,” says management consultant Mark Nadler, “are just more crucial to the survival of the organization than others.” But when you have the right team in place, handing out pink slips can be shortsighted. Besides the costs of legal fees and severance, layoffs have a ripple effect on morale and productivity, says Anat Lechner of New York University’s Stern School of Business. They shouldn’t be used as a quick way to cut costs but as part of a strategy to retool the business for the future.
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