That resulted in the elimination of 544,717 jobs from payrolls. Now, experts say, a piling-on effect is taking hold. Like the volatile stock market, the job market has seen a swift reversal of fortune, though it is not all downhill. Longer-term tasks fall off the screen, and employees have their eyes on other opportunities. The pace of the layoffs is evidence that at least some were not well thought out, say some corporate strategists and academics.
Rapid cuts demoralize the work force and reduce resources.
Studying about 20,000 companies over 12 years, Kearney researchers have found that when companies periodically scale back, the ones that sacrifice earnings for revenue growth have a 50 percent chance of returning to rapid revenue and market capitalization growth within two years, Green said. Those that seek to keep profits up while revenue is shrinking stand only a 10 percent chance, he said.