Reasons for Company Layoffs

Many Reasons for Company Layoffs

There are a variety of different reasons for company layoffs. In some cases, layoffs are the result of economic conditions while others can be tied to strategic business decisions.

Downsizing

Companies that have more employees than they need or that they can financially support often downsize their workforce.

Plant or Branch Closings

When a company closes a plant, branch office, or other worksite, employees who are not able to transfer to other locations are laid off.

Offshoring

When companies move part or all of their business operations to overseas locations, domestic employees are affected by layoffs.

Outsourcing

If an organization decides to utilize independent contractors to handle tasks that employees have been taking care of, the end result will often be staff layoffs.

Automation

If office or plant automation makes it possible to maintain production levels with fewer employees, the result may be employee layoffs.

Going Out of Business

One of the most common reasons from company layoffs is the unemployment that results when a company goes out of business.

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Reasons for Company Layoffs