Layoffs: Unless required for survival, a horrible act

I think it's socially irresponsible to hire too many people during good times, only to lay them off when the business cycle goes South.  It happens all the time, I've seen it firsthand.  Today, many firms use layoffs as a way of telling Wall Street that they are being responsible - and frequently they get a short lived bounce in the stock price.  Note the phrase 'short lived'.  

In my view, socially responsible companies don't need layoffs when they are still viable or making money. It is not an expense reduction strategy with an upside.  It should be a strategy of last resort, recognizing the pain and suffering that layoffs bring to its victims. 

I'm not alone in this view.  Last week, Barry Diller went on record saying that layoffs are a horrible thing to do to people and society when your company is not at risk of bankruptcy.  For once, I totally agree with him.   

Check out this video story:  Mass layoffs by profitable firms a horrible act

Comments

[George]

I have been the victim of a layoff (and was out of work in my chosen profession for ~2 years), so I agree that they are a difficult thing for the individual that is laid off. That said, if a company waits until the last minute and uses layoffs as a last resort for survival, the company is already doomed to fail.

As you allude, companies should hire responsibly throughout all cycles but overhiring and trimming when times are tight does not make the organization irresponsible, just mismanaged at some level.

The goal of every company is (or should be) profitability. If not, the company should not exist. Sometimes that involves trimming workforce; this is a sad but unavoidable truth that we all must accept.