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Discussion in 'Current Events' started by Unspeaked, Jan 26, 2009.
Bloody Monday: More Than 50,000 Layoffs in One Day
Is it possible for employers to just cut worker hours rather than fire people?
In some cases yes, but one CEO once explained to me that it's generally considered most effective to let go of employees from underperforming units, or let go of underperforming employees - rather than cut hours or wages across the board.
Yes, but in addition to that companies would most likely have to alter the payroll significantly because many people are salaried, benefits eligibility would probably change and overall it's an administrative nightmare.
We took a secret poll of our staff a couple of years back, asking people if they'd rather we cut their hours by 10% or have a RIF. Virtually everyone opted for the RIF, betting that their performance would keep them safe.
From a management perspective, it's not as easy to restrict hours as you'd think, unless you have a very steady and predictable volume of work to produce. Our business [printing] is not one that is conducive to micro-management of hours. Also, the morale hit is terrible when everyone is expected to perform at the same level of productivity but knows they are taking essentially a 10% pay cut. Better to keep your best personnel whole and try to ride it out, I think.
That's exactly what a lot of companies have begun doing in recent weeks.
The technical term is "furlough" and it's becoming increasingly popular.
On the downside, it helps companies "hide" layoffs and workforce reductions, since there's no real way to measure furloughs other than a complicated and approximate breakdown of productivity numbers.
Ugh. I wish the airlines would use that definition. My wife will likely get furloughed soon, and the only difference between it and getting laid off is that she might get called back to work in a few years when times are good.
I'm sorry to hear that.
You're right - it is a very vague term. All it really means is that the company isn't letting the worker go. The reduction in hours could be one less day a week or it could be their entire shift indefinitely. As you say, the real difference is that it's supposed to be a temporary reduction.
Yeah, it sucks. Nature of the business, unfortunately. Hopefully I'll be able to find something else for her to do while she waits to be recalled.
many firms did just that during the great depression. kellogg cut their employees to a 6 hr day and eliminated bonuses and breaks. but they gave the employees an across the board pay increase so they were only down about 15% in actual wages.
here's the kicker-employee satisfaction and productivity skyrocketed. kellogg got a lot of press for their efforts and became the #1 cereal company-besting long-time rival Post cereal brands.
other companies went to a 4 day week and enjoyed similar successes.
slashing and burning the payroll is poor business strategy. it cuts company morale, diminishes product image and quite often leads to mistakes and poor performance by overworked/stressed employees. many financial experts also believe that by the time most cost cutting measures pay off, the recession is over with and the company is understaffed for the increase in business.
on the upside, many companies were founded during poor economic times...GE, Disney, HP and microsoft. innovation will always sell.
I like to be ahead of the game.....which is why I was made redundant last Friday after 9 years with my firm
Given there was no massacre is it a good idea to call it "bloody" Monday?
It was pretty bloody if your one of the people who lost a job.
Right - sometimes just reducing hours means they still have benefits, which is very costly...
BTW - love your Avatar...