Layoffs tend to increase employees' levels of stress, burnout, and insecurity and to decrease morale, job satisfaction, and trust. In an ORGANISATION the layoff of one individual in a company may appear minor, but it often causes a ripple effect in organization where employees work together to achieve a common goal. The company faces a greater challenge when layoffs occur en masse.
Direct Costs:- The company often ends up incurring costs as a result of the layoff that minimize the savings. For Example:- The company may have to issue severance pay to outgoing employees, pay overtime wages to remaining employees and use placement services for temporary help.
Increased Turnover:- Layoffs can disillusion top-ranking employees who then opt to leave the company.
Decreased Customer Loyalty:- When a company lays off its employees it sends out a message to customers that it is undergoing some sort of crisis. Fewer employees could mean delays in the delivery of goods and services, further alienating customers.
Emotional Distress:- The person who is laid off suffers the most distress, but remaining employees suffer emotionally as well. Because the layoff disrupts the status quo, employees have to pick up extra responsibilities and form new work relationships, which can cause stress.
For the EMPLOYEE laid off may exhibit shock, anger, distrust, doubt, frustration and escapism. And the employee layoff can devasting effects on both suspended or terminated employees as well as those who survived.
Therefore, The laid off the employee not only impact on the employee personally by this their families, and their trust both are broken. A layoff refers to a situation where the employer lets go of an employee due to a halt in production, the need for a workforce with a different skillset, or having to relocate the business. It is different from firing where an employee is let go because of their demeanor and malfeasance.
