Are layoffs an indication of failing management?

Question

I have a paper to write on this subject. I need some examples or articles to support or disagree with this. Also, if you want to throw in your opinion, its always welcomed.

See, I think rather than laying people off, maybe "trim the fat" of executive perks or bonuses. Why should people lose their jobs because a CEO stills wants to make $100,000 and year?

You guys rock.

Answer 1

Layoffs can be temporary or permanent. I worked at a college foodservice that laid off a majority of its workers every summer and then called them back in the fall. Everyone got to collect unemployment, but it reduced the cost of labor by only paying wages during 9 months of the year.

Presently I work at a global company whose workforce has dropped by two thirds over the last five years. Most of these were due to exporting jobs to other countries where labor is cheap or the final tier manufacturer has located a facility within that country and by our company following, we reduce shipping costs and therefore keep competitive within our field.

When a local factory closed due to moving its entire facility outside the country, its entire workforce was laid off permanently. For jobs lost due to relocation outside the country, there are government programs for retraining the workers and temporarily replace lost wages by extending unemployment benefits. All of these have little to do with failing management.

I have worked at one place or two that I was laid off due to failing management, they were both restaurants. New restaurants have a very poor survival rate. Everyone who can cook thinks they can run one. Not true. Good food is necessary but knowing food costs, production and building costs, and making it al balance isn't easy. I know from personal experience. The biggest issue is when the owner/manager thinks that the money coming is theirs. In actual fact, very little of what is in the register is truly theirs. Most have no business plan or any idea of taxes, fair wages, or workman's compensation when they open their doors. It's just a matter of big dreams and lack of knowledge.

Answer 2

I worked for ten years in the insurance industry in Hartford and I saw many rounds of layoffs. The perception amongst the rank-n-file employees was that the bigwigs were "trimming the fat" by laying off people who had maxed out salary-wise and had been with the co. for too long. They did it by "eliminating the position." Then, three months later, they'd create a "new position" that was almost exactly like the old position and would hire someone new, at a lower salary grade, to fill that position. Nice. But perfectly legal. Another reason for laying off would be that the stock prices would go up consequently after a layoff. Great way to line the shareholders' pockets.

Answer 3

Sometimes, yes. Sometimes, no.
In cold climates, like the northeastern United States, people who work for landscapers know they will be laid off when the growing season is over. People who work as snow plow truck drivers know they will not have work when spring arrives.
Advanced technology may render some jobs obsolete. Companies that made copper wire and cable saw a significant loss of business when fiber optic cables were invented. When the demand for a product falls off, there has to be a cut back in production.
When the demand for gasoline increased, and supplies tightened, people began switching from gas guzzlers to fuel-efficient vehicles. The manufacturers of the gas guzzlers had to cut back on production, causing lay-offs.
It could be argued that this was also a failure of management. Some may argue that manufacturers like Ford and General Motors were irresponsible for making and selling gas guzzlers when they have to know that gasoline is in limited supply. Toyota is an example of good management, by comparison. They make small, fuel efficient vehicles and hybrids while GM is still advertising big SUVs. Sales at GM and Ford have plummeted. Sales at Toyota are going up.

Answer 4

not always. all employees contribute to the success (or lack thereof) of a company to varying degrees. The degree of the blame increases with the amount of responsibility an employee has.

For example, if a union decides to go on strike because they want 60 days of holidays a year and thus ruin the company - who do you blame ? Both the management and the employees ! The management failed to create a situation where everybody's interest are aligned with the companies. The employees were to short sighted to understand the effect of their actions.

Or, if a CEO commits fraudulent transactions and other notice and are intimidated to speak up and prevent it - they are all at fault. (you know what large company I might have in mind right now)

It is never really black and white

Answer 5

Not neccessarily,

First I would write about management and the duties of having a great team in place for a business to be successful.

Lay-offs are done because there is a decline in market demand for your product or service. In order to not go out of businesses the company re-organizes itself so that it can compete with other businessess trying to do the same thing.

Take for instance Boeing. If orders for planes are in from countries like China, and Boeing gets the contract then they will not have to lay off employees and may possibly need to hire more because of the increase of demand for planes.

But if nobody is buying planes, then they cannot afford to keep employees and will have to lay off some workers.

I have read some of the responses thus far, and do not agree it is because of the big checks C.E.O's of companies are getting. Of course it does not help, but it does not hurt either.

Businesses are forced to pay them incentive money because if they do not they would go work someplace else. It is like Professional Football. If you want a great quarterback...well you gotta pay the big bucks.

Answer 6

Not where I worked. I worked for a Fortune 500 company, and layoffs usually occurred right before/after they bought another company, or right around the time budgets or annual reports were due and they needed to look really good on paper. For the most part, they targeted the people with lots of tenure, who had worked their way up into higher salaries and/or were close to retirement.

Answer 7

Yes I think so, the lay-offs are usually a sign of bad indication, when a company should cut costs

Answer 8

poor work perfomance, low profit margin, orders to downsize from third party, management can only manage what is there. If it is only managers getting layed off, then I would say bad management.

Answer 9

It's a way of streamlining operations (making them more efficient) in a country which cares more for profits then the people who make those profits for them.

Answer 10

O' YES if they can't handle the office orders,than how can they MANAGE the production floor!!!!