Why Organizations Lay-off Employees Essay

There are numerous reasons why organizations lay off or reduce force (RIF). Organization occasionally goes into recession and subsequently need to reduce the number of workers to remain afloat (Savolainen & Häkkinen, 2011). Also, at times organization may need to maximize their profits through minimizing their expenses and therefore lay off some workers. In this way, managers and leaders need to lay off workers in an appropriate way that will not arouse fear and distrust among the remaining employees.

The managers or leaders laying off employees can undertake various actions to ensure that the remaining workers are not fearful or distrustful. For example, before laying off workers, the leader should hold a meeting with all the employees. In the meeting, the leader should inform the workers the situation of the organization and the subsequent reasons for laying off workers (Murphy, 2016). Let’s say, the leader could point out that the organization is undergoing some challenges that lead it to downsize and ensure its survival.  Also, the leaders or managers could set out a certain among of money that should be given to the employees who are going to be laid off to ensure they transition without so much struggle. The financing could also help them search for employment in other organizations. The employees could also be given some training in areas such as financial planning. All these actions should be undertaken before informing the employees who will lay off. Withholding the names of those who will be laid off until taking appropriate action to ensure the workers are ready to leave their workplace is vital in reducing its impact.

One the other hand, it is necessary that leaders or managers not to send the letters of employment termination before preparing the employees for the same. Also, it is wrong for the leaders not to inform the workers the criteria of selecting the employees to be laid off as this will seem as a biased RIF (Savolainen & Lopez-Fresno, 2013). For example, the manager could pinpoint the nonfunctional departments, the need to maintain gender balance or consideration of individuals with special needs. In this case, a leader or manager may reduce their fear through acting fairly or being completely transparent regarding the circumstances leading to the RIFs. Partiality and transparency will form part of the moral boost and subsequently confidence.


Murphy, C. (2016). Fear and Leadership in Union Organizing Campaigns. SAGE Open, 6(1), 2158244015623932.

Savolainen, T., & Häkkinen, S. (2011). Trusted to lead: Trustworthiness and its impact on leadership. Open Source Business Resource, (March 2011).

Savolainen, T., & Lopez-Fresno, P. (2013). Trust as intangible asset-enabling intellectual capital development by leadership for vitality and innovativeness. The Electronic Journal of Knowledge Management, 11(2), 244-255.