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[closed] What are the reasons for layoffs when office management companies need to let people go?

My name is Aimee and I am a business senior student in college who attends Concordia University. So far I have some general level of knowledge in marketing, administration, management, and accounting. I would like to ask a question about the turmoils and stress that company bosses go through when they have to let people go, or fire them. I understand that some people have to change their companies so that they do not go out of business, but are there other reasons that people are fired? Why do workers get fired?

Thank you,
Aimee #business-administration #business-management #leadership

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Praveen’s Answer

Hello Aimee

There are various reasons of why there is a layoff in a company. In most cases the reasons are the same across different companies. In some extreme situations the reasons may differ from company to company. The general reasons that I have seen in my 11 yr professional experience with Dell and HP are:

Performance of the Employee
Opex Cost (Operational Cost of running a business) if higher than the returns of the business, the company is under loss and need to downsize
When Businesses merge or Companies merge, there is always an overlap of the work being done and de-duplication of the work results in downsizing
Today everything revolves around faster TAT (turn around time), hence machine learning and automation gives you the output faster than an individual, so technology in itself is a key driver
The Cost of outsourcing the work is cheaper than having an in house employee

The stress that a company boss has to go through while laying off his staff is enormous, but if you have to be a good boss and run your business and keep your customers happy, the difficult decision has to be made. A lot of consulting is done while a layoff is being made. Multiple teams will be involved in helping the boss arrive at his decision. How many employees have to be downsized, from each department, then the individual managers will have to make that call off who from his team who has to be let go. How much cost does the company incur in terms of the severance package, how will it impact the customers, how will the market react to this (stocks), etc.

The above are some of the major reasons, but they are not the only reasons. Please let me know if there are any more questions you may have.

Have a good day.

Praveen Ashok

Thank you comment icon That is great for me to learn. I did not realize the consulting aspect of layoffs, and it helped add to my understanding. Aimee