2 ms·
Layoffs are financially deceptive, because it's hard to put a dollar value on skills and experience. Training new hires is usually a lossy process. The job stil
by jdietrich 8y ago
Layoffs are financially deceptive, because it's hard to put a dollar value on skills and experience. Training new hires is usually a lossy process. The job still gets done, but the overall effectiveness of your workforce is diminished in ways that are hard to quantify.
Off the top of my head, the best example I can give is Circuit City, who pretty much committed suicide through layoffs. Throughout the 2000s, they laid off their more expensive retail staff, initially replacing commission-based sales people with hourly workers, then laying off older workers with seniority pay and replacing them with new hires. It saved money, but sales suffered as a result, particularly for big-ticket items. They wilfully disposed of their key competitive advantage over online retailers - experienced, knowledgeable sales staff.
https://www.stereophile.com/news/11569/ https://www.stereophile.com/news/11569/
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/01/AR2007050101623.html http://www.washingtonpost.com/wp-dyn/content/article/2007/05...
- vortico 8y agoHmm, I followed the Circuit City layoffs a while back, but it seems that they didn't trade untrained staff for other untrained staff with the intention of making them better employees than who they replaced, but they traded already trained staff for cheaper untrained staff---and then kept them untrained. If I remember, they did this in response to their impending doom, but it was not the original cause. It was their attempt at a short term problem, but it was not enough to counter the declining trend of retail appliance sales, so this decision ultimately wouldn't have affected them. (But anyway, not really important for this discussion.)