Is an involuntary layoff in your future? It might appear to be the quickest way to cut costs but Flavio Martins sees things differently.


Permanently cutting benefits and wages may not be the answer either.

It can often lead to major morale problems and spreads quickly through a company. Morale affects work product quality and customer relationships. It may tempt workers to lose company loyalty, leading to theft of property, resources and time. Finding a win-win situation in the face of involuntary layoffs or other dramatic cost reductions is challenging, yet practical.

It might just be time to get creative. Think about the following options in your company:

  1. Temporarily reduce the work week by cutting hours. Ideally, moving to a four-day work week lets employees pick up a part time job to augment their income.
  2. Opt for a 40 hour – 4 day work week. Lots of upside and the extra savings in energy costs may help the bottom line.
  3. Eliminate overtime. Cut out redundancy, reports and other time-consuming activities.
  4. Freeze recruitment activities. Learn to do without. Prioritize what is important in the department. Avoid overloading the remaining employees with non-essential activities.
  5. Retrain employees for open positions. Invest in your workforce for long-term flexibility. Recruiting departments can redirect their efforts internally.
  6. Offer a sabbatical to employees at 1/3 their wage. Employees can use this time to complete higher education or gain new skills.
  7. Employees may opt to take unpaid extended time off if they know their position is waiting for them. There are some consequences as Dr. John Sullivan explores in his post: Employee Furloughs Can Be a Bad Alternative to Layoffs.
  8. Create a shared work program. Two employees can work part-time covering one full-time position. Some states have programs to support a reduction in work hours as Bob Confer blogs: Save money and people with Shared Work. A great alternative for employees who struggle with the work/life balance.
  9. Eliminate or cut temporary workers or consultants. Evaluate and keep up the services that add long-term value.
  10. Offer voluntary layoffs or early retirements. Providing a cushion or bridging employees to their retirement age may make the difference.

The best message management can send to their employees is “we are equally invested in the solution”. For example, if the company decides to temporarily cut hours to a four-day work week, management will “walk the talk” by taking the same action.

And if you are still in doubt of what to do: Ask your employees before doing an involuntary layoff.