Layoff

A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees (collective layoff) for business reasons, such as personnel management or downsizing an organization. Originally, layoff referred exclusively to a temporary interruption in work, or employment but this has evolved to a permanent elimination of a position in both British and US English, requiring the addition of "temporary" to specify the original meaning of the word. A layoff is not to be confused with wrongful termination. Laid off workers or displaced workers are workers who have lost or left their jobs because their employer has closed or moved, there was insufficient work for them to do, or their position or shift was abolished (Borbely, 2011). Downsizing in a company is defined to involve the reduction of employees in a workforce. Downsizing in companies became a popular practice in the 1980s and early 1990s, since it was seen as a way to deliver better shareholder value by helping reduce the costs of employers (downsizing, 2015). Research on downsizing in the US, UK, and Japan suggests that downsizing is being regarded by management as one of the preferred routes to help declining organizations, cutting unnecessary costs, and improve organizational performance. A layoff usually occurs as a cost-cutting measure.…

A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees (collective layoff) for business reasons, such as personnel management or downsizing an organization. Originally, layoff referred exclusively to a temporary interruption in work, or employment but this has evolved to a permanent elimination of a position in both British and US English, requiring the addition of "temporary" to specify the original meaning of the word. A layoff is not to be confused with wrongful termination. Laid off workers or displaced workers are workers who have lost or left their jobs because their employer has closed or moved, there was insufficient work for them to do, or their position or shift was abolished (Borbely, 2011). Downsizing in a company is defined to involve the reduction of employees in a workforce. Downsizing in companies became a popular practice in the 1980s and early 1990s, since it was seen as a way to deliver better shareholder value by helping reduce the costs of employers (downsizing, 2015). Research on downsizing in the US, UK, and Japan suggests that downsizing is being regarded by management as one of the preferred routes to help declining organizations, cutting unnecessary costs, and improve organizational performance. A layoff usually occurs as a cost-cutting measure. A study of 391 downsizing announcements of the S&P 100 firms for the period 1990–2006 found that layoff announcements resulted in a substantial increase in the companies’ stock prices and that the gain was larger when the company had prior layoffs. The authors suggested that the stock price manipulation alone creates a sufficient motivation for publicly traded corporations to adopt the practice of regular layoffs. ===Effects of layoffs in the workplace=== Layoffs have remained the greatest way for a company to cut costs. Although from the employer's perspective a layoff is beneficial for the business, layoffs create an uncertainty in the workplace environment and lowers other employees' job security as well as creates an apprehension and fear of termination for the remaining employees, and subsequently lowers overall motivation in the workplace environment. According to Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations, in the post-layoff environment, there is a need for empathy, tangibility, self-knowledge, and relentlessly seeking customers among the surviving employees. The remaining employees may have feelings of survivors guilt. In order to diminish negative effects of layoffs, Wayne Cascio suggests alternative approaches to layoff and downsizing as "Responsible restructuring" approach. Optimism is critical for rebuilding the workplace environment because employees look to their leaders for stability and predictability. No matter the position in an organization, employees will look for job security. ===Effects of layoffs to the employee=== Employees (or former employees in this case) can be affected in several ways. When an employee is laid off temporarily, their general trust in long-term work may decrease, reducing expectations upon rehire. After an employee withstands a layoff, the effects can trickle into future employment and attitudes. Any case of layoffs may leave the former employee less inclined to trust future employers, which can lead to behavioral conflicts among co-workers and management. Layoffs can erode confidence, making employees feel insecure about their job performance and career prospects. Despite new employers not being responsible for a prior circumstances, job performance may still be affected by prior layoffs. Many companies work to make layoffs as minimally burdensome to the employee. At times employers may layoff multiple people at once to soften the impact. Denial stage is the first stage in the emotional reaction to change or layoffs, in which an employee denies that an organization change or layoff will occur. Anger stage is the second stage of the emotional reaction to downsizing, in which an employee becomes angry at the organization. Fear stage is the third emotional stage following an announcement of layoff, in which employees worry about how they will survive financially. Acceptance stage is the fourth and final stage of the emotional reaction to downsizing, in which employees accept that layoffs will occur and are ready to take steps to secure their future. ===Effects of layoffs in the American economy=== Layoffs create lower job security overall, and an increased competitiveness for available and opening positions. Layoffs have generally two major effects on the economy and stockholders. The way layoffs affect the economy varies from the industry that is doing the layoffs and the size of the layoff. If an industry that employs a majority of a region (freight in the northeast for example) suffers and has to lay employees off, there will be mass unemployment in an economically rich area. This can have leave ripple effects nationwide. Unemployment is the biggest effect on the economy that can come from layoffs. ==Mass layoff== ===United States=== The Worker Adjustment and Retraining Notification Act (WARN) requires an employer "to provide at least 60 calendar days advance written notice of a plant closing and mass layoff affecting 50 or more employees". ===China=== China’s legal system focuses heavily on advance process and worker participation. Congress passed China’s Employment Contracts Act in 2007 to provide a specific mass layoff procedure aimed at ensuring transparency, consultation, and regulatory oversight before any mass layoffs proceed. It requires an employer to explain current business conditions to the labor union or all employees at least 30 days in advance, prepare a layoff plan with a list of all employees to be laid off, the timeline, specific layoff process, and legally required severance, and solicit labor union or employee opinions. The plan must then be submitted and approved by the local labor regulator, with the employer required to incorporate any labor regulator recommendations into a revised plan. In addition to rulemaking and recommendation authority, the congressional act delegates authority to labor regulators to order employers to cease and correct violations, and labor unions are empowered to require employers reconsider any layoffs that violate applicable laws, regulations, or collective bargaining contracts. Weinstein, Bruce, "Downsizing 101", BusinessWeek magazine, September 12, 2008. CASE No.: 2001-ERA-19 A case before the U.S. Department of Labor, wherein the terms RIF, IRIF, and VRIF are commonly used. APPENDIX D; GLOSSARY OF TERMS A glossary in a U.S. Department of Energy document that includes brief definitions of RIF, IRIF, and VRIF. Reduction in Force Under OPM's Regulations, United States Office of Personnel Management UK Redundancy Legal Rights UK specific information on the legal rights of those being made redundant. Airline Industry Layoffs – by Patrick Smith Job Losses Tracker (UK-based) Layoff news and tracker Layoffs news and tracker. Rising After Redundancy – RTÉ Ireland TV Series

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