business news in context, analysis with attitude

The New York Times reports that while many companies continue to cut jobs from their payrolls, believing that such trims will help their long-term performance, there is an argument that the opposite may be true.

“Some argue that layoffs, combined with a careful revamping, can set the stage for growth,” according to the NYT. “Others, however, contend that companies that avoid cutting jobs reap huge benefits in loyalty and productivity.”

Peter Cappelli, a professor at the Wharton School, tells the NYT, “If you look just broadly at whether companies that lay off do better, the answer
appears to be no,” noting that "the ones that lay off the most are already the ones that are in the most trouble.”
KC's View:
Part of the problem, according to the article, is that too often job cuts are seen as a solution, not just as a strategic part of a larger initiative. Which is why they often don’t work.

It has been our experience that there is only one thing worse for a company than layoffs. And that’s managers who lie to you about layoffs.

To use one of our favorite dictums, “Trust, like the soul, never returns once it goes.”