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OCTOBER 8, 2001
A NEW WORLD -- THE ECONOMY & THE MARKETS
The Costs of Downsizing vs. the No-Layoff Payoff
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Massive layoffs can backfire after taking into account:
-- Severance and rehiring costs
-- Potential lawsuits from aggrieved workers
-- Loss of institutional memory and trust in management
-- Lack of staffers when the economy rebounds
-- Survivors who are risk-averse, paranoid, and political
Companies that avoid downsizing say they get:
-- A fiercely loyal, more productive workforce
-- Higher customer satisfaction
-- Readiness to snap back with the economy
-- A recruiting edge
-- Workers who aren't afraid to innovate, knowing their jobs are safe
Data: BusinessWeek
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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