Financially is it better to conduct lay-offs all at once or little by little? Comment your reasoning below!

All at once50%

Little by little50%


525 views1 Upvote1 Comment

Principal in Finance (non-banking), Self-employed
From a financial standpoint, I think it's best not to do it all at once because you don’t want to overextend yourself. But, if you don’t lay off enough then you’re likely to do it all over again. Culturally and morally speaking, it's probably better to do what you need to do rather than let it drag on because you don’t want people to wonder if they're going to be next, or who among their friends is going to be next. To elaborate, if you know that you over-hired and you want to downsize, but not over-downsize, then it's a good idea to do a little bit of layoffs at a time. Whereas with a company that's going through a difficult set of circumstances - like David's Bridal for example - they're going to lay off 90% of their workforce because their circumstances are so bad. They have to stop the bleeding immediately. If you want to be able to get a lot of costs out of the business quickly, you get rid of people. But, oftentimes that has significant intangible consequences that go well beyond just the numerical.

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