Pros of Layoffs (Reasons)

Cons of Layoffs (Externalities)

Ÿ Increasing profits, economic outlook, and overall company competitiveness.

Ÿ Cutting costs by reducing employee benefits and liability.

Ÿ Laying off high paid employees and replacing them with lower paid employees.

Ÿ Getting rid of disengaged workers that cannot “pull their own weight” (“dead wood”) and simply increase workload for other employees.

Ÿ Stockholders might receive a better return on their investments.

Ÿ Strategically planned layoffs lead to smarter organizations when tasks are properly revamped and reassigned (Mannino, 2010) .

Ÿ Existing employees might be in a bind when knowledgeable and skilled workers are laid off. Consequently, customer service may suffer.

Ÿ Current workers and laid off employees may risk suffering from occupational, psychological and other health issues

Ÿ Limited employees within a company/department may lead to more unhappy workers, which in turn may lower company revenue.

Ÿ Laying off skilled workers may slow down production damage quality within the company.

Ÿ Attitudes become negative because employee thoughts of the possibility of easily being replaced and just being a number to the company.