What Happens to an Organization That Lays People Off?

Termination Letter

Termination Letter

What happens to an organization that lays people off?  They suffer.  Severely.  The productivity of the organization declines, and the quality of the company’s product or service declines.

An interesting article at HR.com provides some sobering statistics.

  • 74% of employees who kept their job amidst a corporate layoff say their own productivity has declined since the layoff.
  • 69% say the quality of their company’s product or service has declined since the layoffs.
  • 77% of surviving workers say they see more errors and mistakes being made.

Even though I’ve survived a number of layoffs myself,  I still find the magnitude of these statistics frightening.

As I’m aware of universities, hospitals, oil field service companies, and all manner of other businesses going through or about to go through layoffs, I’m deeply saddened.  And worried about the larger effect on our communities, upon our nation.

  • What happens if a major hospital suffers a decline in staff productivity, a decrease in service level, and an increase in errors and mistakes?
  • What happens if a university suffers a decline in faculty productivity, a decrease in service levels, and an increase in errors and mistakes?

What about your organization?  If you’ve gone through layoffs, what kind of productivity declines have you seen, what kinds of errors and mistakes have you seen?  Is it possible that the cost of the lower productivity and the higher errors and mistakes far outweighs cost savings from personnel reductions?  My guess is yes.

photo:  Shadrach Christopoulos (Flickr)

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