LAY-OFF WITHIN COMPANY

Reason for Lay-Off within Company

Reason for Lay-Off within Company

Layoff is the temporary suspension or permanent termination of employment of an employee or (more commonly) a group of employees for business reasons, such as the decision that certain positions are no longer necessary or a business slow-down or interruption in work. Originally the term "layoff" referred exclusively to a temporary interruption in work, as when factory work cyclically falls off. However, in recent times the term can also refer to the permanent elimination of a position (Mellahi, 2004). Downsizing is the 'conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness'(Mellahi, 2004). Further euphemisms are often used to "soften the blow" in the process of firing and being fired, (Wilkinson 2005, Redman and Wilkinson,2006) including downsize, excess, rightsize, smartsize, redeployment, workforce reduction, workforce optimization, simplification, force shaping, recussion, and reduction in force (also called a "RIF", especially in the government employment sector). Mass layoff implies laying off a large number of workers. Attrition implies that positions will be eliminated as workers quit or retire. Early retirement means workers may quit now yet still remain eligible for their retirement benefits later. While redundancy is a specific legal term in UK employment law, it may be perceived as obfuscation. Firings imply misconduct or failure while lay-offs imply economic forces beyond one's control (Mellahi, 2004).

Most organization lay-off employees because of they want outsource or due to recession like financial crisis. However in today world business trend is changing and companies outsource their work because its cost is low (Baumol, 2003). Outsourcing (wikt: outsourcing) often refers to the process of subcontracting to a third-party. While outsourcing may be viewed as a component to the growing division of labor encompassing all societies, the term did not enter the English-speaking lexicon until the 1980s. Since the 1980s, transnational corporations have increased subcontracting across national boundaries. In the United States, outsourcing is a popular political issue, especially during election years. A precise definition of outsourcing has yet to be agreed upon. Thus, the term is used inconsistently. However, outsourcing is often viewed as involving the contracting out of a business function to an external provider. In this sense, two organizations may enter a contractual agreement involving an exchange of services and payments. Of recent concern is the ability of businesses to outsource to suppliers outside the nation, sometimes referred to as offshoring or offshore outsourcing (which are odd terms because doing business with another country does not mean you have to go offshore) In addition, several related terms have emerged to grasp various aspects of the complex relationship between economic organizations or networks, such as nearshoring, multisourcing and strategic outsourcing. Almost any conceivable business practice can be outsourced for any number of stated reasons. The implications of outsourcing objectively and subjectively vary across time and space. Companies those who lay-off their employees their major causes are as follows:

Cost savings. The lowering of the overall cost of the service to the ...