Some Firms Cut Costs Without Resorting to Layoffs

Posted on December 17, 2008  Comments (0)

Some Firms Cut Costs Without Resorting to Layoffs

Hypertherm Inc. has never laid off a permanent employee in its 40-year history. A 20% downturn in sales in recent months led the closely held maker of metal-cutting equipment to eliminate overtime, cut temporary staff and delay a facility expansion, says Chief Executive Dick Couch.

Managers are transferring employees to busy segments from those with less work. The Hanover, N.H., company also may bring some outsourced manufacturing in-house to keep its 1,100 workers busy, Mr. Couch says.

Private companies, like Hypertherm, may feel less outside pressure to cut jobs and a deeper commitment to employees than publicly held firms, some experts say. Still, a few public companies — including Lincoln Electric Co. and steelmaker Nucor Corp. — also have no-layoff policies.

Good for them. Smart management practices that pay off in long term results. One thing I think some employees forget is the value of such respect for employees. When times are good it is easy to see the lure of higher pay, over long term stability. Layoffs are never good. If you work with an employee and cannot find a way for them to provide value after serious effort then letting them go is fine with me. But that shouldn’t have to do with the economy. That has to do with them not being able to fulfill their responsibilities. I am very suspicious of such claims though, normally management either needs to fix the hiring process or the employee management/development process. The system is the problem not the person (the vast majority of the time).

Related: Bad Management Results in LayoffsFiring Workers Isn’t Fixing ProblemsFind the Root Cause Instead of the Person to Blamemanagement improvement jobs

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