Managing layoffs: Experiences at the challenger disaster site and the pittsburgh steel mills

Abstract

As distasteful as the announcement and implementation of layoffs may be, it is critical that managers confront this issue. They need to gain an understanding of how layoffs affect employees and to learn how to manage workforce reductions more effectively. Our research suggests several points for managers to keep in mind. First, management should seriously consider alternatives to layoffs; and if a layoff is unavoidable, the number of people to be laid off should be reduced as much as possible. Second, corporations should offer employees a variety of assistance programs to help them to find new employment in the long run and to cope with unemployment in the short run. Third, corporations should follow specific procedures to treat the laid-off employees humanely, and to decrease losses in morale and productivity among survivors. Fourth, corporations should work cooperatively with unions, governmental agencies, and the local community to minimize the negative after-effects of layoffs. Layoffs of blue-collar workers as a result of deindustrialization of manufacturing, and layoffs of white-collar employees as a result of acquisitions, are likely to continue. Managers need to think carefully about the consequences of such layoffs; and they need to take actions to reduce the emotional suffering and financial hardships that layoffs can create.