Companies often respond by tightening their belts and finding ways to be more cost-effective when business isn’t good. Recessions are a normal part of the economy’s life cycle. RecessionĮconomic downturns are one of the most common reasons for layoffs. Downsizing can occur when company leadership decides that certain departments aren’t as important anymore or that the company is going in a different direction. If there are multiple employees with the same job responsibilities, some employees in that role may be laid off following a merger.
Here are some of the most common: A MergerĪ merger is when two companies are consolidated into one company. If there’s an economic downturn or poor business conditions, companies might choose to lay off employees to fix internal problems and balance the budget. Unlike your household finances, companies operate on a large scale and need to make a profit.
Reasons for a LayoffĬompanies, like families, have a budget to keep and financial goals to meet. While the employees who continue to work may experience guilt or imposter syndrome. Employees who are laid off may experience emotional distress, anxiety, and depression. We are all more aware these days that there is a human element to job loss. There can also be nonmonetary costs to laying off employees. However, layoffs can backfire and end up costing the company more than if it hadn’t gone through with them. Effects of LayoffĬompany leaders often think that layoffs will be cost-effective and are the best option when business is slow. You may end up returning at reduced hours so that your employer can make payroll and keep you and your co-workers employed. Employees can also get fired for misconduct, such as theft or sexual harassment, which goes beyond ordinary job performance issues.Ī furlough is often a temporary leave of absence from work. That is, the employee wasn’t meeting the expectations of the employer. Typically, when an employee is fired, there are issues regarding job performance. Furloughedīeing laid-off is when you no longer have a job, but it is not your fault. While each results in a job loss, you’ll need to take different steps to address each. It is important to know the difference between a layoff and other similar terms like being furloughed or being fired.
A layoff might also happen after a merger. Other terms for a layoff include downsizing, rightsizing, eliminating redundancies, and restructuring. You might be told you are being laid off in an email, a letter, or in a conversation with your boss. In most cases, employers are required to give some notice, and there may be signs that a mass layoff is coming. Layoffs happen for many reasons, and they are typically out of your control.Ī mass layoff happens when the company tells many current employees that they are being laid off. If you get laid off, it means you lost your job through no fault of your own. Other times, they result in permanent job loss. If you get laid off, you no longer have a job or the associated benefits and paycheck. Layoffs, Their Effects, & Similar TermsĪ layoff is a termination of employment. By taking the proper steps after a layoff, you can make it to the other side without too many financial hardships or serious negative effects. This article will explore what it means to be laid off, how it differs from other types of job loss, what rights you have, and what to do if you lose your job because of a layoff. Whatever the case may be, there are ways to make this period more manageable. Other times, you know it’s coming and you can make a plan to ease the transition. Sometimes you are completely surprised and caught off guard when you are let go from work.