Layoffs may not save companies money

Layoffs are touted as a way to shore up the bottom line, but they sometimes cost more in the end. Anne Helen Petersen, author and writer of Substack newsletter Culture Study, joins host Krys Boyd to discuss why older generations have grown used to layoffs, why we shouldn’t have to live that way and the case against layoffs as a cost-saving measure in the first place. Her Substack post is “Layoff Brain.”

Blog Post: Layoffs aren’t a long-term solution 

By Brianna Flores, Think Intern

When companies are in difficult financial situations, they may find that cutting staff feels unavoidable. But layoffs may not be the best answer. 

“They create this sort of anxiety that spreads throughout an organization and decreases all of those things that layoffs are intending to produce,” says our guest, Anne Helen Petersen. 

There is a common idea that company leaders opt for layoffs as a long-term fix because they reduce costs for the company and can create more productivity in the workforce.  

“They want that short-term gratification of cutting headcount, cutting salary numbers,” Petersen says. “This might be a short-term fix, but it is actually not a fix at all.” 

Those who remain at a company after layoffs tend to have negative side effects. 

“You expect the remaining number of people who are employed to do the same amount of work,” Petersen says. “[But] they are overburdened and are often more likely to burn out, to do worse work, to do less precise work.”  

Not only do employees start underperforming at their job, but they also start to overthink their future. 

“It creates a lot of anxiety because it means that you as an individual can do very little to mitigate the risk of layoffs,” Petersen says. 

It can cause uncertainty for those who were laid off, but to help cope, they may need to rethink their perception of a company layoff. 

“Layoffs are irrational and they are in the vast majority of cases, not about me,” Petersen says. “Move forward with that confidence, [because] it does not mean that you are a bad employee or were bad at your job.” 

To learn more about the long-term impact a layoff can cause within a company, listen to the podcast above.