So, lets circle the wagons and forget my own challenges. Is it OK for a company to lay off seasoned employees and replace them with people with H-1B visas at 40% less pay? The roles were not eliminated, just the people.
Great article from Inc. that hits home:
http://www.inc.com/erik-sherman/6-reasons-layoffs-are-really-dumb.html
" When creating a product or service requires a group effort, then the group needs to be able to communicate and work together effectively. But even if you're not developing the latest title to slay zombies, you still have trouble with regular layoffs because creativity is one of the fundamental requirements for innovation. According to researchers, innovation is the product of groups working together, not of a few remarkable individuals. When you break the working relationships, you force employees to start from zero, which hampers ongoing competition.
Intellectual property loss.
Most companies depend on intellectual property--not just copyrights, trademarks, patents, and trade secrets, but all the know-how of making business processes work. Every time you send people out the door, you lose the knowledge they have of the business.
Business relationships.
Business also runs on relationships with partners and customers. Technically the relationships are with the company, often detailed in contracts. But the
realrelationships are with the people the customers and partners do business with. When you send those people out the door, your organization has to start rebuilding the interpersonal aspect of business all over again.
Cost.
This is an ironic one. When a company lays people off, it thinks it is saving itself money. And it does in one sense. But every time you have to staff up again for that next big project, you have the costs of finding and hiring new people and then getting them up to speed, which means lost productivity and all sorts of soft costs that can be hidden--and significant.
Trust.
When people are often sent on their way, you undermine any sense of trust that the remaining employees might have. How long before they're in the next batch? That affects morale, employee effectiveness, and productivity.
Turnover of important talent.
When employees don't trust the employer, they start looking for other opportunities. The ones most likely to leave are the ones that will have the easiest time finding something else. In other words, you chase your top talent off to your competitors.
It may be that you really have to lay people off at times. But if so, better take some time to reevaluate your business model and strategy and all the stacks of hidden costs of doing so. It may be that there's a better and more predictable way of doing business that ultimately increases the bottom line.
