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The Stealth Layoff

Posted by: Jena McGregor on May 16, 2008

The story in the New York Times today about stealth layoffs is a little haunting. It looks at the trend among Wall Street banks to quietly lay people off—while they’re out for surgery, without formal announcements—rather than doing mass cuts all at one time. People aren’t finding out that layoffs are going on until they get cryptic e-mail bouncebacks, see cardboard boxes and trash bins lining the halls, or notice someone’s desk has been packed up for them.

Whether it’s driven by managers’ fear of facing people or an attempt to avoid bad publicity on the euphemistically named “reductions in force,” such “stealth layoffs” are hardly good for a culture. Anyone who’s ever worked in an environment that knows layoffs are coming—but not when—know how crippling that can be on morale and productivity. Making a big announcement may be painful and earn you some unwanted negative press, but the simmering disgruntlement and distraction in a culture can do a whole lot more damage.

A friend of mine at another publication sounded a similar note recently—big layoff plans are rarely announced there, people just trickle out bit by bit. Has anyone else noticed a similar trend in other industries?

Reader Comments


May 17, 2008 2:57 PM

I absolutely is absolutely a wiser move for the morale of the team (company as a whole)when the communication lines are open from "top to bottom."

"Responsiveness" seems to be rare in the business world today yet I feel that it is one quality that will separate an average leader from an "ordinary" leader.

The individual(s) involved in the decision process should have enough integrity and respect for the employee(s) involved and act accordingly.

A well-thought out, respectful, forthcoming plan put into place will retain some respect from an exiting employee. The alternative is a bitter, resentful individual on the way out.

Good Post!

Mark Salinas, MN

Wally Bock

May 19, 2008 6:18 PM

No matter what your business, you want people to concentrate on their work. There's no way that can happen when they're wondering, "Who's next?" Instead they're crafting their own exit strategies, gossiping with others about the "ain't-it-awful" state of things and burning up the copier running off resumes.

Mo Flo

May 20, 2008 3:48 PM

I have noticed a large up-tick in stealth layoffs, or rather, reasons to leave. It seems that nobody is "fired" or "laid off" anymore so much as they are forced out, denied opportunities and resources so that they might soon leave as well. A way of reducing resources without encouraging lawsuits.

Harwell Tate

January 16, 2009 5:43 PM

Joanne Kennedy (the woman in the article form JP Morgan Chase who was laid off while recuperating from surgery) will be probably be blackisted by potential employers and/or denied severance for badmouthing the firm in the press.

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