A thought-provoking article challenging the common assumption: that layoffs improve performance. The reality? Research shows layoffs rarely deliver sustained financial gains—and often create deeper problems. [greatergoo…rkeley.edu].
Leading organisational psychology researchers like Wayne Casio conclude – they should be the last tool we reach for, not the first.
What’s the real impact?
- Short-term cost savings can be misleading or temporary
- Long-term effects include lower morale, reduced innovation, and weakened performance [dailygood.org]
- Layoffs often spread through “copycat” behaviour—companies doing it because others are [greatergoo…rkeley.edu]
- The human toll is significant, affecting wellbeing, trust, and future earning potential [dailygood.org]
So what can leaders do instead? The article highlights a more intentional path:
- Rethink strategy rather than cutting people
- Explore cost-saving alternatives (redeployment, reduced hours, leadership pay cuts)
- Prioritise transparency and long-term health over short-term optics
Some companies have chosen to protect jobs—and in doing so, preserved trust, culture, and resilience.
Bottom line:
Layoffs may feel like a quick fix, but they can undermine the very outcomes leaders are trying to protect. The harder path—rethinking how we manage through uncertainty—might also be the smarter one.
