Statement of Research Problem
Owing to the fact that layoffs are already a persistent phenomenon on both sides of the Pacific, this research will undertake a cross-cultural comparison of the adverse impacts and benefits, if any, every instance of layoffs has on the remaining workforce. Current research suggests layoffs trigger not just the expected apprehension and drop in morale but also dampened creativity, disruption in social networks, mistrust, job dissatisfaction, and increased voluntary turnover.
Annotated Bibliography
Gu, A. & Pao, J. (2006). Baidu folds software division and lays off staff. South China Morning Post, p. 2.
In mid-2006, NASDAQ-listed and Chinese Internet search engine leader Baidu.com announced layoffs of 30 employees in three cities around the country.
Directly affected, the company disclosed, was a software division tasked with creating custom search engines for businesses. The move appears to have been taken because turnover at the division ran to just 2% of gross revenue. Analysts opined that Baidu effectively abandoned this enterprise software venture to concentrate on its core business.
As a sop, perhaps, to holders of the stock on NASDAQ, Baidu pronounced itself upbeat about a 44% domestic market share, the doubling of Chinese going online over the next five years (from 111 million as of December 2005), the tripling of online advertising activity on the mainland (from 4.6 billion yuan at end-2006 to 15.7 billion yuan in 2010), first-quarter revenue that was 300% better than year-earlier levels, and the launch of “Baidu Space” to be marketed as an alternative to Google Blogger and MSN.
Lacey, H. (2004). Redundancy offer has left a lot of ill feelings. TTG, Travel Trade Gazette, 45.
In answer to a presumably hypothetical query posted by a sickly junior manager who had received a notice of redundancy and felt aggrieved, Lacey discussed the pros and cons of what to do next. She counseled prudence in taking the employer to court primarily because, win or lose, this would adversely impact the dismissed manager’s chances of landing another job in the future. Besides, entering into mediation or court proceedings would entail time, expense, and uncertainty about the outcome. In the end, the settlement might even be lower than the offered settlement.
Lacey also opined that any employer is within its rights putting a stop to the lost time and inconvenience of accommodating a frequently-ill employee.
Other effects, the author ventured, were lower morale and dissatisfaction of colleagues who had to cover up for the absent worker. In the end, this advice article in a trade magazine did not offer any statistics or empirical research to make its point.
Algeo, D. (1996). Hospital layoffs continue. Denver Post, p. D1.
This is a news story about layoffs at Columbia-HealthONE, the largest hospital system in Denver.
Two months after taking over the helm of the company, President Jeffrey Dorsey announced the layoff of 68 clinical and 71 administrative employees.
This was the second round of publicized layoffs since Columbia HealthONE was taken over Columbia/HCA Healthcare Corp., based in Nashville, in October of the prior year. The merger had been motivated by the goal of slashing operating costs. In keeping with this goal, the company claimed that most of the vacated positions were to be left open. By this time, HealthONE had let go no less than 500 employees.
Consolidation and layoffs still seemed likely across all three hospitals combined in the Denver metro area. Too many empty beds signaled overcapacity amid pressure from insurers and health maintenance organizations to significantly reduce elective overnight stays.
Nonetheless, the head of the Denver Medical society insisted that the quality of overall medical care in the city was by no means affected.
Alexander, S. (2009). Rochester in a waiting mode on IBM layoffs: The company’s 4,200 employees, along with the city, are anxious about the personal and broader impact of job losses. Star Tribune, D.1.
In March this year, IBM announced the second round of layoffs that brought total staff let go around the U.S. and Canada in just the first quarter to 8,800. This increased apprehension among staff at the Rochester headquarters and raised the specter of the thousands of jobs IBM slashed in 1993 in the city alone.
As IBM is extremely reticent about going public with anything but exciting good news, the city fathers and dependents of IBM employees in the city have to wonder what this IT hardware, software and IT services giant has in store for them. To some extent, at least, the impetus seems to come from shipping the jobs overseas, outsourcing offshore to lower-cost affiliates like those in Brazil, the Philippines, and India. The long-term trend towards open-source software as well as the adverse effect of the current recession that commenced with the home financing collapse in late 2007 doubtless contributed to weakened demand from the businesses that comprise IBM’s market.
Cho, H. (2005). In dark times, let the light shine; When a company faces a crisis, its best strategy is to be as direct and honest as possible with workers. The Sun, p. 1K.
Restructuring and layoffs were already a fact of life for American business, even during the optimism-filled interval between the recessions of 2001/2002 and the current one. In late 2005, the author reported, medical colossus Merck already planned on 7,000 job cuts and shuttering five plants up to 2008. General Motors bit the bullet and would shut down nine plants and slash 30,000 positions in the same time frame. Elsewhere, several airlines had entered Chapter 11 and the populace was already inured to news about pensions being cut.
Cho compiled well-meant advice from anecdotes about coping with the demoralization, anxiety, loss of confidence in leadership, distractions, staff turnover, and other factors that damage productivity in the workplace. Her counsel includes being upfront with staff and stock market analysts about bad news as early as possible (lest misinformation race through the grapevine fast), being proactive about plans for turning things around, training managers on handling termination meetings with as much compassion as possible, what to tell the rest of the staff, assisting those let go find work again, and keeping lines of communication open.