Question

You are the president of high performing division and the Chief Executive Officer tells you in order increase the profits by another $260M over forecast; you need to layoffs 9 people. And also by doing this you will be promoted with 26k salary increase and stock option and also the analyst say the stock would go up in time to cash in our stock options. What you will do? Explain the pros and cons of your actions for a. yourself, b. employees, and c. shareholders.

Write (typed) a 2-3 good paragraphs about it and it should be in favor of layoffs. Thank you

Answer 1

Benefits of layoffs to the company will be:

• If Laying off workers is done on the basis of seniority, it will allow you to keep your most experienced workers. Company can maintain productivity levels and mitigate any dip in work under performance associated and better flexibility to handle a smaller workforce. And being experienced and senior workers, they will require less supervision, giving company a better way to focus more on other business aspects in terms of improving profit margins and reducing associated fixed and variable costs.
• Company can divert saved cost as working capital to any revenue stream or buying of any technology resources which can optimize its functioning capability in positive way. Laying off such people who are highly paid than what they deserve or under performance compared to what benefits they have been paid so far, can significantly reduce costs in short and long term
• Retaining and rewarding the top performing or senior employees reduces threat of attrition of high or key talent, can be beneficial to company, especially in complex or large projects, where more experience to deal is required as compared to junior and low experienced guys. It also results in improving personal satisfaction of such employees leading to higher dedication with minimum supervision required from company sides, when time comes