Managing Human Resources, Eight Edition

Managing Layoffs

Typically, an organization will institute a layoff when it cannot reduce its labor costs by any other means. Figure 6.3, which presents a model of the layoff decision and its alternatives, shows that there are alternatives to layoffs, such as early retirements and other voluntary workforce reductions, that managers can consider as means to reduce labor costs. After managers make the decision to implement a layoff, they must concern themselves with the outplacement of the former employees.

Alternatives to Layoffs

Most organizations search for alternative cost-reduction methods before turning to layoffs. Attrition is a common strategy. Other approaches include freezing employment, not renewing contract workers, and encouraging ...