5 Reasons Why Layoffs Are Not Sexy

Layoffs aren’t a growth strategy.

I know some leaders who get a kick out of the short-term financial boost they get after a round of layoffs, but I question how helpful layoffs actually are to a company that doesn’t really need to do them. The key word there is need.  (Full Disclosure:  I have laid off people myself)

I think of modern companies as a portfolio of people, not a portfolio of products, services, or assets.  Cutting out part of your people portfolio is similar to selling off assets to add cash reserves.  It may make sense in the short term, but selling assets isn’t an intelligent strategy to make money in the long term.

Layoffs aren’t sexy and should be reserved for desperate times.  It’s a desperate measure.

Here’s why:

  • Layoffs make everyone uncomfortable and cause the remaining people to start looking around
  • Talented people like to work for a growing company, not a shrinking one
  • Layoffs change a good company culture and breed lingering distrust
  • Layoffs highlight poor decisions by top leadership (over hiring or poor vision/planning)
  • The company permanently loses knowledge about it’s operations, it’s customers and itself

It might feel great to boost the stock price or add more cushion to the bottom line, but it isn’t a strategy to win.  Save it for the desperate times.

Successful leaders lead their people forward, not out of the building.

Do you agree?

Have a great night,

Aaron@Biebert

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Published by Aaron Biebert

I'm a director, film/video exec producer, leader & 8pm Warrior. I am passionately chasing my goals at all times. I'm listening. Let's talk!

7 comments on “5 Reasons Why Layoffs Are Not Sexy”

  1. I agree 100% Aaron. I was laid off in December from a corporate job I truly loved. The Fortune 200 company was, and still is, doing better than ever financially, with huge cash reserves. We were told that the entire marketing department was being re-organized to increase efficiency and performance. Yet, the “victims” were not selected based on talent or past accomplishments–the group included many “superstars.” It was quite illogical.

    Now, I’m a freelance marketer, and guess who my #1 client is? :-)

    1. Marianne, that really doesn’t make sense. Sounds like they have a fear of commitment. Why else would they lay off someone and then hire them as a freelancer?

      Oh, and the indiscriminate layoffs sound smart…not. ;-)

      Thanks for sharing. I appreciate it.

  2. Funny, I was having a similar conversation with a “former” co-worker last night. I was laid off a few months back due to a merge that had nothing to do with the health of the company (it was doing quite well) but had everything to do with buying the Founder out (he wanted to retire and none of the Board members could buy his shares). My position was eliminated as it was in direct competition with someone from the other company. With that merge, everyone started looking over their shoulders and are still looking over their shoulders today almost a year later. They are losing good folks slowly but surely because of that. That’s a great corporate culture to be working in, don’t you think?

    1. Nope, I don’t think it sounds great at all. Thanks for sharing a great real life example of how layoffs are hurting a company that didn’t need to do that.

      Kills culture, creativity, caring culture…

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