While the economy seems to be picking itself up with a somewhat recovering market, unemployment is still very high. Until employment picks up there is only so much that can be done to save the suffering economy. With all of the economic downturn in the past couple years many people have lost jobs, but I can’t help but wonder where is the line drawn between laying off workforce for true economic reasons and taking the opportunity to lay off workers due to the economic panic.
I have a number of acquaintances that work for various companies that have lost their jobs. Some were employed for organizations that truly tanked. However, some worked for companies that are still making high earnings. There is no doubt that some corporations start cutting workers as soon as the economy shows any sign of being grim, regardless of how the company itself is performing. The working staff of any given organization is typically the most costly commodity of that company, but obviously the most essential as well. It seems to me that firing workers as soon as the economy starts going south is a prescription for disaster.
Obviously there is the big picture here. As the economy weakens corporations start eliminating workforce. With almost all companies jumping on the firing band wagon unemployment of course rises, thus negatively affecting almost every facet of the market. This seems to be a catch 22 in the world of free enterprise. The individual company may prepare itself for a financial downturn, but the combined contribution of all organizations laying off workers results in tough economic times for everyone.
I have worked in places before where as soon as a tough financial year is predicted there is a “reorganization” of the workforce, AKA numerous layoffs. Ironically, within a few months, half of those folks are brought back but in different positions. It seems strange to me that so many organizations consider the efficiency of their structure only when the economy gets tough. Most probably presume that if the company is performing well then don’t fix what is not broken. Yet, as soon as clouds loom on the economic horizon the first thing to go is workers.
I suppose that the economy is, like so many in this class often say, only what our joint imagination makes it. In this case though the joint panic of all involved always results in difficult economic times. The looming economic crisis is often exploited by the imagination of corporations themselves. Perhaps cutting the workforce does salvage the company as a whole in some cases, and perhaps only when things get tough to some organizations do serious self-reflection and see the inefficiencies of their labor force. Some no doubt just take advantage of the panic to slash where they can. In any case, it all results in further economic downturn so the entire ship sinks for everyone!
Here is an interesting article about big corporation layoffs from this past January:
http://articles.latimes.com/2009/jan/27/business/fi-layoffs27

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