A person being laid off may seem insignificant, yet it has a significant impact on the businesses. Layoffs are not a plan but an option when a business is not profitable or experiencing financial difficulties. The corporation has numerous difficulties with mass layoffs. The challenges the company can face are mentioned below,
- Costs: The main goal of layoffs is to reduce costs. However, the company frequently finds itself having to pay out more money to departing employees in full and final settlements and leave encashments. When business improves, an organisation must spend money on acquiring and training new employees.
- Emotional discomfort: Not only does the person who is laid off experience distress, but so do the remaining employees. The remaining employees' workloads or responsibilities will increase as a result of being laid off. Employee productivity may suffer if they are anxious or stressed out. Observing a co-worker leave for no apparent reason could inspire the existing staff to hunt for other positions.
- Customer loyalty: Layoffs can have a negative effect on customers because they are directly related to the organisation's financial health. Less staff can result in service delays that increase the likelihood that customers will leave.
According to the Industrial Disputes Law, before making any layoffs, a company with more than 100 employees must obtain permission from the government. Organisations risk facing legal repercussions if the law is not obeyed.
Layoffs may seem like a simple solution, but it has a significant influence on the organisation. Therefore, it is claimed that layoffs can be viewed as a first-aid measure but are unquestionably not a long-term fix.