There has been, and will continue to be, a lot of attention about corporate layoffs.Workforce reduction strategies are the same in a bull market and in a bear market, the only thing that changes are the tactics.
However, there is something about companies doing this all at once that makes this a bit disconcerting. The layoffs are so huge and the impacts on already declining stock prices are so significant that many organizations are resulting to tactics they normally wouldn’t employ in a different economic climate.
Take for example the timing of these internal announcements. Typically reserved for Friday, layoffs are taking place on every day of the work week except for Tuesday (which is ironically the one day the postal service would like to halt service – but that is another story).
The reason for making layoff announcements on Friday is so you don’t disrupt the traditional workplace, provide the “downsized” a cooling off period and allow the remaining workforce a chance to recover. Retailers typically have their “weekend” on Monday and Tuesday.
The old rules also don’t apply as to who is and is not impacted. In the past, the human resource folks were the last let go – because they have to stick around to process the “downsized”. Not anymore, HR professionals, in many of the recent firings, were among the first wave. This raises concern about who is handling the termination and do they “know” how to carry out the action?
Finally, there is public notification. In a normal environment businesses will announce and layoff on the same day. In recessionary periods, organizations need time to communicate information face to face – thus delaying the amount of time it takes to make the announcement because there are so many people to contact. Some businesses are using the time to delay the inevitable of a stock price decline, that will always come back to bite those organizations in the backside.
So, what’s the answer? Transparency. With so much being made of the banking industry and TARP funds, 100% transparency is the new “green”. Investors, employees and their respective communities will respond favorably to transparency during recessionary communications if care and compassion is shown to those who are considered the “victims” of the recessionary tactics.