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How Companies Decide Who to Lay off

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Akins Employment Guide

Companies make decisions about layoffs based on various factors, and the specific criteria can vary depending on the company and the economic context. Here are some common factors that companies consider when deciding whom to lay off:

Performance and Productivity: Employees who are not meeting performance expectations or contributing significantly to the company's goals may be more vulnerable to layoffs.

Seniority: In some cases, companies may implement layoffs based on seniority, retaining employees with longer tenure and experience. This can be part of a strategy to cut costs while maintaining institutional knowledge.

Skills and Roles: Companies may assess the skills and roles needed for the organization's current and future goals. Employees with skills that are less relevant or in declining demand may be more at risk.

Departmental Considerations: Certain departments or business units may be targeted for layoffs based on their performance, financial viability, or strategic importance to the company.

CostCutting Measures: Layoffs are often driven by the need to reduce costs. Employees with higher salaries or those in roles deemed nonessential may be more likely to face layoffs.

Adaptability and Versatility: Companies may prioritize employees who demonstrate adaptability and versatility. Those who can easily transition to different roles or take on new responsibilities may have a better chance of retaining their jobs.

Performance Reviews and Feedback: Employee performance reviews and feedback may play a significant role in identifying individuals for potential layoffs. Consistent poor performance or behavioral issues may make an employee more susceptible.

Union Agreements and Employment Contracts: Companies must adhere to any agreements with labor unions or employment contracts that outline specific procedures and criteria for layoffs.

It's important to note that ethical considerations, legal requirements, and company culture also play a role in the decisionmaking process. Companies may strive to be fair, transparent, and considerate of their employees' wellbeing during the difficult process of downsizing.

posted by Mbodjed2