Summary

• There are intangible costs to reduce a work force. Failure to handle layoffs in a consistent and fair manner increases the odds that an employee will take legal action, bad-mouth the company, or pursue both routes.

• Layoffs done indiscriminately may also increase risks of inappropriate or illegal conduct such as inventory shrinkage, vandalism, theft of confidential information, industrial sabotage, or workplace violence.

• Legal red flags require additional due diligence. Managers need to take into account federal and state laws and regulations, so they need to be briefed far in advance.

• The company’s survivors—those not fired—need to be listened to and supported to ensure the company can rebuild with them as part of a strong foundation for the future.