A new study has been released that reveals that layoffs, ostensibly cost-cutting measures, are often not wholly necessary to balance business costs.
The study, by Resume Builder, indicates that businesses are not being honest with their employees, and many are instead using layoffs as a cover for other issues.
Large Study
Resume Builder received responses from a large number of business leaders for their survey.
The survey, conducted online, included 600 business leaders from a variety of organization types which had to employ at least 10 members of staff.
Layoffs Last Year
The study attempts to make sense of the slew of layoffs in recent years, with large companies making significant cuts in 2023.
Layoffs were made both at struggling, smaller companies, but also at large corporations such as Hasbro, and tech giants including Microsoft and Google.
Layoff Trend Continues Into 2024
The layoff trend did not dissipate as we moved into the new year, and many employees look likely to face a job hunt at some point in the coming year.
According to another Resume Builder survey, 40% of business leaders are expecting layoffs at some point this year.
Layoffs Not Necessary?
The latest survey, released on Tuesday, reports that the majority of respondents said that a large proportion of their layoffs were unnecessary for cutting costs.
More than 300 of the 600 business leaders surveyed said that over 75% of layoffs were not necessary for the company’s balance sheet.
It’s You, Not Me
One of the conclusions drawn from the survey is that the layoff decision is less to do with the business itself than is often made out.
The Chief Career Advisor as Resume Builder, Stacie Haller, says that it “indicates that numerous companies use layoffs as a cover for firing employees who are underperforming.”
Legal Bypass
One of the more egregious cited reasons was to sidestep wrongful termination claims from previous employees.
If the official reason given by a company is that the employee’s wages can no longer be afforded, it can make it more difficult to make a claim that the employment was unfairly ended.
Lack of Loyalty
Haller says: “Instead of addressing performance issues directly, these companies cite cost reductions as the reason for layoffs, obscuring their true motives.”
The disguise of the reasons for the layoffs means employees are not being given a chance to improve their performance by the company through formal procedures.
Other Reasons
Some other reasons for using layoffs, as opposed to firings were given in the survey by the business leaders.
Layoffs mean that employers can sometimes avoid having to make severance pay, and avoid hurting the feelings of their employees.
Performance Often a Factor
Although layoffs are regularly framed as a business cost, the Resume Builder survey shows the range of hidden reasons for the action.
3 in 10 managers said that the performance of the employee is always a factor when they make a layoff decision.
