Unplanned Layoffs


Downsizing employees or mass layoffs is the process of eliminating an organization’s workforce through strategic planning so that organizational effectiveness can be enhanced. Downsizing comes with multiple immediate benefits, such as avoiding bankruptcy, boosting profits, helping in a reorganization, creating new relationships, and getting rid of disengaged employees. However, the problem starts when layoffs become unplanned and abrupt, especially with the current economic recession in place.

In the past couple of months, numerous US-based companies, such as Meta (parent company of Facebook), Amazon, Twitter, Intel, Morgan Stanley, and Citi, have announced mass, unplanned layoffs. For instance, Twitter, under its new CEO Elon Musk, has cut more than 50% of its total workforce. According to reports, layoffs in September and October exceeded 60,000, and this was only in the United States. Unplanned layoffs can have a major impact on the confidence of an organization.

Reasons Why Unplanned Layoffs Are Taking Place

1. Cost cutting

With the global recession taking place, companies are resorting to cost cuttings. Since organizations are not making enough revenue to cover their operating expenses, they resort to layoffs to continue making enough profits to keep their shareholders happy.

2. Inflation

In addition to the economic recession, retail inflation is also reaching sky-high numbers across the globe. The IMF (International Monetary Fund) has forecasted that the overall GDP growth internationally will be low in both 2022 and 2023, especially because of the aftereffects of the COVID-19 pandemic and ongoing Russia–Ukraine conflict.

3. Less e-commerce dependency

When the COVID-19 pandemic took place, there was a massive surge in demand for e-commerce since everyone was staying at home and spending a lot of time on the internet. This allowed companies to expand quickly by going on a hiring spree to meet the growing demand of customers. But as the effects of the pandemic started to wear out, people started stepping out of their homes, and thereby overall consumption fell, leading to losses.

Consequences of Unplanned Layoffs on Employee Confidence

Employee layoffs or downsizing can have devastating effects on both terminated and suspended employees, as well as the employees who have survived the job sack. Laid-off employees tend to experience anger, shock, distrust, frustration, doubt, and escapism. Therefore, if employee layoffs are not handled properly, the result can be disputes and protests. Apart from that, it can also worsen the existing work culture inside the organization.

Alternatively, the employees who survived the job sack also experience similar feelings and lose their trust in their employer and thereby start looking for better employment opportunities on the horizon. The entire procedure can leave a serious psychological mark on their overall confidence, which can make them want to switch companies as soon as they get the chance. Additionally, the productivity of the employees in the organization is also hampered since they experience dissatisfaction and bitter feelings toward the current company management.

Suggestions for Handling Unplanned Layoffs

From an employee’s perspective, unplanned layoffs can seem like the worst nightmare. However, it is recommended that such a situation should be considered as an opportunity for a fresh start. Some effective methods for dealing with unplanned layoffs are as follows:

1. Overcoming the shame

Sometimes, employees believe that the layoff is because of their faults and thereby start doubting their efficiency. But to move forward, one needs to get rid of such negative thoughts following a recent job loss. It should be remembered that situations are not one person’s fault, and sometimes unavoidable business circumstances lead to such scenarios. That is why it is suggested that one take a short break before looking for a new job again. Such a hiatus will help one assess his or her priorities at work and thereby have a better understanding of how they want to take their career forward.

2. Keeping finances in check

Money is a critical aspect of everyone’s career. Since layoffs mean no income for the period, it can make employees feel depressed. So, one must keep a close check on his or her finances. Once an employee understands where he or she stands financially, he or she can keep the expenses in check until the next job is found. Such exercise can help reduce anxiety and stress, especially during a period of unemployment.

3. Learning new skills

As layoffs take place due to alterations in business scenarios, it could mean that the right time has arrived to learn new skills and thereby bolster your resume for the next job. For instance, if an employee was working as a CA (Chartered Accountant) in his or her previous job, then opting for an additional degree, such as a CFA (Chartered Financial Analyst) can make the person more attractive to prospective employers looking to hire new employees.


There is no denying that the immediate financial impact of an unplanned layoff can affect both the psychological and physical well-being of an individual worker. Not to mention there could also be instances when the employee faces depression, bankruptcy, and other personal issues.

Also, unplanned layoffs can result in unemployment, which can last up to six months or more, leading to hopelessness among employees. Thus, it is essential that company managers and HR professionals efficiently manage the impact of unplanned layoffs so that the morale of the current employees remains unaffected.

Author : Ravikiran Sk (Paybooks.in)

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