The Right Way to Handle Layoffs

On paper, cutting staff can make sense. In practice, it's a painful process that, if poorly executed, can hamstring turnaround efforts

Layoffs are a last resort for most small employers. They know cuts can quickly throw their companies into a tailspin by decimating morale and can hobble turnaround efforts once demand revives. Many first try to find ways to reduce payroll costs without cutting staff on whom they spent serious time and money to train and develop. Of course, not every company can avoid layoffs, particularly in a sharp downturn, when sales are tanking. Companies with fewer than 50 employees have shed more than 1.2 million jobs since October, according to estimates by payroll provider ADP.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.