80 percent of managers say they use layoffs as a soft firing, and not for cost-cutting

Tuesday, 06 August 2024 04:36

80 percent of managers say they use layoffs as a soft firing, and not for cost-cutting

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80 percent of managers say they use layoffs as a soft firing, and not for cost-cutting

According to a new survey, business leaders have used layoffs to head off lawsuits and avoid hurting employees’ feelings, among other reasons.

Technically, layoffs occur because a company is cost-cutting or restructuring, and not through the fault of an employee. Firing occurs because an employee is at fault. But while layoffs are technically supposed to be blameless, they are still bad for employees, bad for companies, and bad for communities. For example, one study found that layoffs can lead to increased criminal behavior.

Despite that, a new survey suggests companies continue to rely on layoffs—even when they aren’t necessary for cutting costs. Resume Builder polled 600 business leaders involved in termination decisions about their reasoning behind conducting layoffs. The highlights are depressing:

Most layoffs aren’t financially necessary: To begin with, 63% of respondents said their company had layoffs in the past year. Half of respondents said that over three quarters of the layoffs at their company in the past year weren’t necessary for cost-cutting.

Many layoffs are an excuse to fire employees: 80% of respondents said they used layoffs to terminate employees instead of firing them. And 27% of respondents said that over a quarter of the layoffs at their company were used to let go of people so leaders wouldn’t have to fire them.

Companies are afraid to fire people: About 62% of respondents said they used layoffs instead of firings to maintain company morale; 59% said it was to avoid wrongful termination claims; 54% said it was to avoid severance; and 38% said it was to avoid hurting employees’ feelings. And 78% said they wanted to fire the employees in question for poor performance; 46% said for violating company policy; and 45% said for attendance problems. About a third of respondents (31%) said performance always influences their decisions about who gets laid off, while 51% said performance often influences their decisions.

“A disturbing trend is emerging where organizations reduce their workforce under false pretenses,” said Resume Builder’s chief career advisor Stacie Haller. “Many companies implement strict return-to-office (RTO) policies to indirectly encourage employees to leave voluntarily, thus avoiding the need for layoffs or terminations . . . Such practices contribute to the growing erosion of trust between employers and employees.”

Fast Company