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LAYOFF

Layoff Overview

Layoff also called redundancy in the UK, is the temporary

suspension or permanent termination of employment of an

employee or a group of employees for business reasons ,

such as when certain positions are no longer necessary or

when a business slow-down occurs.

 (^) Layoffs focus on positions, not individuals  (^) Layoffs are not to be used for resolving employee performance

problems  (^) These are not technically classified as firings

What Are The Reasons For

Layoffs?

Lack of Funds:  (^) The U.S. Postal Service recently announced it was on the brink of insolvency. The Postmaster General wants to save $2.1 billion a year, which means 28,000 jobs will be cut

Lack Of Work:  (^) under tremendous pressure from shareholders to cut large losses, new Bank of America laid off 30,000 people by cutting redundant jobs and exiting some of its unprofitable businesses

What Are The Reasons For

Layoffs?

Organizational change:  (^) H.P’s largest cut came after he bought IT consulting firm EDS. HP spent $13.9 billion to diversify. Once he closed the transaction, he fired 24,600 employees whom he felt would be redundant once the two companies were combined. Economical:  (^) Boeing (NYSE: BA) was another victim of the 2001 economic slowdown. The recession, and later the 9/11 attacks, hurt air travel. The commercial aircraft division of Boeing, therefore, suffered all the cuts, with the defense segment untouched.

Selection Of Layoff

 (^) Seniority order Bumping

 (^) Exception : special skills Knowledge Or Abilities

A department may retain an employee irrespective of seniority if the employee possesses special skills, knowledge or abilities (“SKAs”) that are not possessed by other employees in the same classification and which are necessary to perform the ongoing functions of the department.

Alternatives To Layoff

 Transfer or reassignment to open vacant

positions

 Pay cuts (FEDEX)

 Shut down retirement funds( G.M)

 Cut back on costs:

▪ (^) Energy saving ▪ (^) Training cost ▪ (^) Free lunches ▪ (^) Office supplies (sprint)

Alternatives to Layoff

Luxury Retreats Montreal Alternative: Employee Shuffling

The villa rental agency has shuffled eight of its 75 employees from departments like product development to revenue-generating positions like sales

Alternatives To Layoff

Best Buy Minneapolis Alternative: Enhanced Severance

Best Buy (BBY) in December offered nearly all 4,000 employees at its corporate headquarters a sweetened severance package if they agreed to leave voluntarily. Five hundred employees took the company up on the offer, which for the average employee included 7.5 months of pay, one year of employer-paid health and life insurance, and outplacement services

Alternatives To layoff

Nokia

Alternative: Mass voluntary resignations

On Feb. 24 the cell-phone maker said it will seek up to 1,

voluntary resignations and also appealed to employees to

accept holiday time as payments, instead of cash, for

overtime work