The shock of mass layoffs is just the beginning for companies

“After nearly 8.5 years at Google, I received notification this morning that I have been affected by layoffs and no longer have a role in the company. . . I had intended to spend my entire working life at Google, so this news was hard to absorb.

LinkedIn posts like this By email from Google employees who suddenly lost their jobs this month. Some were dedicated Decades Their life to the company. Google’s parents, letters, tech companies are cutting their workforce by the thousands. The sector collectively shed about 200,000 jobs last year.

A fired Google employee told the Financial Times: “The company’s motto is ‘respect the user, respect the opportunity and respect each other’. Who are they trying to baby?” While laying off entire teams is saddening — and even if it goes against the company’s public image and management style — there are good reasons why mass layoffs are swift. The rash of firings may be due to an effort to protect intellectual property and customer relationships, preventing employees from transferring data and other security concerns.

However, after the initial shock has passed, are employers aware of the long-term consequences of their actions? Sandra Sucher, Associate Editor The Power of Trust: How Organizations Build, Lose, and Regain It, research shows that layoffs have a detrimental effect on employees and corporate performance. “The reason mass layoffs don’t work is because they destroy trust within an organization,” he says.

Companies that have spent years and large sums of money training employees leave the door open not only with organizational knowledge, but also with their networks of relationships.

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A friend at a large tech company had a Slack chat with 15 colleagues. Later, 12 members of the team were fired. The Slack chat died and the problem went unsolved. “You don’t just replace that history, that conversation, that expertise,” he says.

So-called survivors, like my friend, are less likely to trust their employer now and worry about being fired in the future. These remaining employees may resent being forced to take on more workloads in more difficult situations – which may prompt more employees to leave. Cutting staff by just 1 percent could increase volunteer workers’ earnings by 31 percent next year. For researchers University of Wisconsin-Madison and University of South Carolina.

Good will is fragile. Most people who thrive at work do more than what is asked of them. Mass layoffs send the message that instead of hiring someone for all they bring to the job and their future potential, they’re just cogs in a machine.

Knowing that hard work and good performance do not guarantee employment, workers who choose to stay are likely to be least innovative or less innovative when an organization needs them most. All these will hit profitability in the long run.

Companies like Alphabet do the right thing in the short term: layoffs, bonuses and remaining vacation days and six months of health care, access to job placement services and immigration support. But those who have been laid off may be affected for life, as many were after the 2008 financial crisis. They can win their health as well as their finances. A new job at equal or higher pay often does not come immediately.

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Mass layoffs traumatize both those who leave and those left behind—and that matters in the long run. Companies can learn from what happened: they need to grow more sustainably and hire more disciplinedly. As Sucher says, if executives are serious about employee well-being, they must continue to plan for future workforce changes and ride out tough times. Options include furlough payments, withholding of bonuses, pay cuts and voluntary redundancies. If the pandemic has taught companies anything, it’s that there are other ways to thrive in tough times.

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