Companies often present layoffs as a painful decision to cut costs and streamline operations for the organization’s viability, but often layoffs are not objective moves to rightsize. They can also serve as cover for firing underperforming employees, a new survey from Resume Builder found.
The survey, with responses from 600 business leaders at companies that have had layoffs in the past year, found half admit that 75% of the layoffs at their company weren’t necessary for cutting costs.
“Three out of 10 managers are saying performance does matter. Layoffs aren’t only due to a business reason or a change in the organization. Many times it has to do with performance as well, and it seems like an easy way for companies to do this,” said Stacie Haller, a career coach at Resume Builder.
Why disguise a termination as a layoff?
“When you do a termination, you might be opening up yourself to legal action. People quickly might hire an attorney and fight. And if the termination isn’t put forth in the proper way, you might have some liability to your organization,” Haller said.
Layoffs can also steer clear of what might be more expensive severance costs.
Those business leaders surveyed cited other reasons for disguising performance-based terminations as layoffs, including 62% who said they felt it would maintain company morale, and 38% who cited the desire to avoid hurting the employee’s feelings.
Haller noted the majority of business leaders responding to the survey were younger managers, which indicates those who are relatively new to their management responsibilities may see layoffs as an easier option, without the negative repercussions.
“Managers need more training to handle performance issues directly and transparently, fostering a more ethical and effective approach to workforce management,” she said.
Disguising terminations as layoffs is what Haller said is just one of the disturbing things companies are doing to reduce their workforce under false pretenses. Another is strict return-to-the-office policies meant to indirectly encourage employees to leave voluntarily, avoiding the need to fire them.
Resume Builder’s full survey results and methodology are available online.
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