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Layoffs Hurt the Bottom Line
published by , on 21/02/2010

Newsweek’s Lay Off the Layoffs article points out that kneejerk downsizing is actually bad for business. Written by Jeffrey Pfeffer of Stanford University’s Graduate School of Business, the piece cites numerous studies rather than rely on journalistic anecdotes.

Echoing last year’s prophetic comments of the Wells Fargo chairman on talent, the Southwest Airlines HR leader quoted in the article said:

“If people are your most important assets, why would you get rid of them?”

Research has proven that layoffs don’t work. All they do is create active disengagement, lower the stock price, and damage the brand. In fact, the damages to the bottom line are proportional to the severity of the layoffs.

Managing talent in tough times requires understanding the talent management correlations. The new perspective is focused on cutting costs while taking a strategic talent perspective and being mindful of the talent and brand connection.

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