Alternatives to Lay Offs

Companies that are faced by less than rosy outlooks or have just had really bad quarters have been known to turn to lay offs to cut their costs and show investors that they are willing to make changes in order to get going again. Unfortunately, lay offs rarely do much, in the long run, to help a company out.

Downsizing, which requires lay offs, has been seen as the primary agent in a company's cost reduction strategy. While this is effective short term, there is increasing and considerable evidence that downsizing does not actually reduce a company's expenses as much as it may be desired. In some rare cases, after a lay off, a company's expenses can actually increase.

One of the main alternatives to lay offs is restructuring. In cases where lay offs do result in a positive uptake in the year or two after they occur, this positive result is most likely due to restructuring efforts throughout the entire company, as opposed to being attributable to just the lay offs. Job cuts are frequently only part of a much broader restructuring plan. A company may choose to close obsolete branches or plants, overhaul the administration, sell non-core operations, and improve internal processes.

Another option for a company that wishes to save money and reduce costs is to issue a pay cut to all employees. This may not save quite as much money immediately as a lay off but it does save employee morale and allow people to keep their jobs.

Contact a Boston Bankruptcy Lawyer

If you were laid off and are now facing extreme quantities of debt, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346.