Permanent job losses can undermine morale and productivity. Fear of being next in line may cause remaining employees to give up their jobs, look for a new job, or simply take a vacation. This can greatly offset the financial benefits from payroll reduction.
A reputation for layoffs can make it difficult to attract top talent. Experts write that job seekers, especially representatives of Generation Z, prefer stability and may choose companies where there are no layoffs. Even prestigious tech brands may struggle to compete if they’ve experienced multiple layoffs.
Layoffs often result in employees leaving voluntarily, and high-performing professionals frequently leave. This information leakage can further reduce a company’s ability to innovate and compete. Additionally, disgruntled former employees can easily vent their anger on social media, which can damage the company’s reputation and make it difficult to attract new employees.
Source: Ferra
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