Layoffs and their side-effects on Professionals

Layoffs and their side-effects on Professionals

‘Layoffs are mostly bad for companies, harmful for the economy, and devastating for employees.’ -Newsweek (2010)

But still, even the large companies that are wealthy and extremely profitable who constantly ensure their employees that their jobs would be safe, end up doing this. One is not fired or let go of because of his performance. In fact, your professional performance can be great, and you can still get caught up in an unfortunate, widespread corporate lay off. It comes as quite a shock. Not only the employees who are let go of face the harmful effects but also the companies that implemented the layoff.

Talking about today’s scenario where circumstances seem to change by the hour due to a global pandemic, business uncertainties are growing. Most importantly staffing needs are changing. From airlines to events involving annual conglomeration like south by southwest, everyone is feeling the impact of coronavirus. Companies around the world are laying off as demand in industries is declining sharply. Recently Norway’s largest airline, Norwegian, stated it would lay off up to 50% of its employees across all departments. Question is can a company lay off people during a global crisis like this?

Well, it majorly depends on where you work and live, as the rules may vary. For instance, in the US, companies can lay workers off, whereas in Canada companies cannot lay off workers without offering severance pay. A recent survey reported the organized private sector in India is planning to have layoffs due to the impact of coronavirus pandemic and lockdown. However, contrary to this a report stated, IT firms in India are unlikely to lay off workers and they are in a better position to absorb the adverse impact of the pandemic for now. The aftermath of lay off may vary significantly.

Corona Virus: Black Swan of the Economy

An excerpt from Aamodt’s Industrial textbook explains the effect of losing a job on an individual. It states: “From a health perspective, victims of downsizing report increases in headaches, stomach upsets, sleeping problems, cholesterol levels, physical illness, hospitalization rates, heart trouble, hypertension, ulcers, vision problems, and shortness of breath. Emotionally, victims report high levels of stress, increased drug and alcohol abuse, more marital problems, and feelings of depression, unhappiness, anger, frustration, and dissatisfaction with life. Socially, victims are reluctant to share their feelings with friends, avoid family and friends due to feelings of embarrassment and shame, and avoid social situations and entertainment requiring money”.

The loss of a job not only hinders the growth of an individual but existing skills begin to atrophy. Even the temporary lay off has negative impacts on employees’ morale and health, their workgroup creativity and communication, and workforce quality. On the other hand, organizations believe cutting costs like this is a viable option. Lay off can prove to be way more costly than many organizations realize. layoffs do negatively affect the reputation of the company. While some firms are opting for salary cuts and layoffs, others are trying to shield their staff during the pandemic. Each organization is thriving to get through the Impact of Coronavirus and COVID storm. As and when possible companies do look out for the well being of its employees yet when things become impossible to handle, lay off may seem to be an option for them.

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