April 19, 2010

Layoffs as a Strategic Tool

When I first started career counseling, 25 long years ago, layoffs were still viewed as emergency procedures, to be undertaken only under the direst of circumstances.

Companies feared negative publicity for kicking people out of the workplace, not to mention the public perception that they were one step from absolute failure. My, what a difference a decade or two can make. In truth, I started seeing the shift in attitude relatively early in my career. In most parts of the country, the late 1980s marked the first time white collar jobs were being eliminated on a wholesale basis. Prior to this, layoffs were more often used as a short-term pressure valve for factories whose orders might be down, or for seasonal construction workers. As often as not, workers in these scenarios would be brought back when business picked up, which was a good solution for all involved. Employers got to keep their well-trained workers, and employees were able to relax a bit while collecting unemployment. When companies began cutting managers, retail clerks and administrative staff, calling the moves Reductions in Workforce (RIFs), they started on path that can't be reversed. Not only were the cuts well-received by Wall Street (because profits immediately soar if you drastically cut your expenses), but they were supported by local and state governments who scrambled to assist the newly-named "dislocated workers." To be honest, the first time my home state of Minnesota issued a "temporary" tax on employers to fund the dislocated workers fund was the first time I understood that layoffs had now become acceptable as a management practice. Not only were companies rewarded on Wall Street, but now they were being relieved of the financial burden of supporting separated workers as well. And that temporary tax? Still with us, 21 years later, and bigger than ever. Ah, well, what's the use of complaining? As it turns out this is a game that two can play. Recently I've met with clients who are experiencing their second, third, or even fourth layoff. At this point, some are not only enduring the cuts, but inviting them through strategic manipulation of internal programs. Now, instead of fearing a bad review, they use the process to "jump in front of the bullet" of department cuts and earn themselves severance packages and state-funded training. At this stage, it's hard not to ask: Are we headed in the right direction?

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