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Sunday, September 11, 2016

Layoffs Hurt Companies

The cost of layoffs to companies. In Knowledge@Wharton:  

' ... Contrary to popular belief, there’s not much evidence that layoffs are a cure for weak profits, or, to use the current euphemism, that they reposition a firm for growth going forward. “It’s very difficult to sort out the relationship because firms that are laying off are almost by definition in trouble,” says Peter Cappelli, Wharton management professor and director of the school’s Center for Human Resources. “The research evidence has not found any support for the overall idea that layoffs help firm performance. There is more support for the idea that where there is overcapacity, such as a market downturn, layoffs help firms. There is no evidence that cutting to improve profitability helps beyond the immediate, short-term accounting bump.”  ... '  

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