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At some point, mass layoffs just scream “management screw-ups” and there should be major legal consequences for doing so. Otherwise, layoffs become an easy cru

At some point, mass layoffs just scream “management screw-ups” and there should be major legal consequences for doing so. Otherwise, layoffs become an easy crutch for money-grabbing executives to screw over innocent workers without really punishing poor decision-making. For instance, if the total layoffs per year exceed some amount (say 25% of the workforce, which still seems absurd), the company should automatically have to pay a fine, such as 5% of the total salaries that were “saved”. In addition, they should be required by law to give a one-year severance per employee in that situation. Management screw-ups need to come at a damned high price so that this becomes a rarity.

harryh 10y ago
There are laws like this in places other than the US. They mostly make it so that companies hire full time employees at a much slower rate because they are afraid of the consequences of firing people. You end up with a two tier system of real employees and a sea of contractors. It's important to really think through what the actual results of a proposed policy will be. Unintended consequences abound.
laser 10y ago
What if the macro-economic situation changed? A competitor got a strong edge in a winner-take all market? A break-through technology emerged? One of an infinite number of unforeseeable circumstances arose that required a greater than 25% workforce cut independent of any careless management? Requiring a year's severance for every employee cut in such drastic scenarios could easily make many companies insolvent.
danpalmer 10y ago
In the U.K. if you make someone redundant (i.e. Restructuring, not firing for performance/misconduct) then you cannot rehire for that role for 6 months minimum. Also if you make more than a certain number of staff redundant (I believe something like 20-25% of your workforce) then the government gets to audit you to see if it was business malpractice that caused the need for the redundancies.

harryh 10y ago

There are laws like this in places other than the US. They mostly make it so that companies hire full time employees at a much slower rate because they are afraid of the consequences of firing people. You end up with a two tier system of real employees and a sea of contractors. It's important to really think through what the actual results of a proposed policy will be. Unintended consequences abound.

laser 10y ago

What if the macro-economic situation changed? A competitor got a strong edge in a winner-take all market? A break-through technology emerged? One of an infinite number of unforeseeable circumstances arose that required a greater than 25% workforce cut independent of any careless management? Requiring a year's severance for every employee cut in such drastic scenarios could easily make many companies insolvent.

danpalmer 10y ago

In the U.K. if you make someone redundant (i.e. Restructuring, not firing for performance/misconduct) then you cannot rehire for that role for 6 months minimum. Also if you make more than a certain number of staff redundant (I believe something like 20-25% of your workforce) then the government gets to audit you to see if it was business malpractice that caused the need for the redundancies.