Shrinking sales and closing of retail stores and plant locations usually means reducing headcount so the company can operate efficiently.
Layoffs are often a regrettable but absolutely necessary element in controlling costs.
The fact is, more jobs are saved than lost when a company's financial condition can be turned around. Approximately one in four respondents suggested that company layoffs are too low, suggesting the great difficulty management has in implementing employee reductions. Only 4 percent thought the layoffs are excessive and did not address the real problems causing under-performance. Senior management, unless clearly incompetent or involved in fraud, usually are looked at after evaluating the other levels of employees in a distressed business. Rumors of layoffs at 70 percent of the companies caused fewer repercussions than might be expected.