Layoffs Leave Lasting Scars

Mass layoffs significantly diminish employee morale among remaining staff, which often leads to an increase in turnover rates in the year following the layoffs. This exodus typically includes high-performing employees who seek opportunities elsewhere. Consequently, companies face a substantial additional burden of rehiring personnel to replace those who left, even beyond the immediate layoffs. Furthermore, layoffs can hurt a company’s public image, making the business appear vulnerable and deterring potential investments, despite any short-term financial gains. The phenomenon of simultaneous mass layoffs across an industry creates a flooded job market, enabling companies to maintain or lower wages, thus perpetuating a cycle of reduced compensation for workers.