Some employees in 2008 and 2009 found themselves laid off with little or no warning.
In 2008, the unemployment rate began a small rise that rapidly accelerated in 2009, according to the Bureau of Labor Statistics. By the end of 2009, rates had risen to levels not seen since the early 1980s, according to the Misery Index. An unstable economy led many businesses to lay off workers in unprecedented numbers, further upsetting the economy. A variety of factors can influence why employers lay off workers
Downsizing
- When employers decide they need to trim what they consider to be fat on their payroll, the remaining employees must take up the slack. Some company projects that are less profitable may also be cut, ending the jobs of those working on those projects. Employees who don't carry their weight may be the first to go. Often, the last hired are also the first to leave because the company has less money invested in their training.
The company may offer some workers the option to retire early to eliminate employees who earn the highest salaries. This allows the company to keep employees who perform similar work at a lower wage
Company Mergers
- When companies merge, the new owners may prefer to bring their current employees with them and release employees who worked for the former owners. This allows them to reduce redundancy and retain employees who have proven their value and loyalty. The new owners may feel less loyalty to the employees who worked for the company that is absorbed, regardless of their competency
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Out of Business
- In a down economy, some companies can't maintain enough business to turn a profit. The company lays off the employees when the doors close. Some employees may be fortunate enough to take pensions and other benefits with them, but some discover they have little to go on besides unemployment benefits
Probationary Periods
- Many businesses have a probationary period for employees. The time period may vary in length, but the probation allows the company and the employee to evaluate the working relationship without penalty to either side. If the company discovers that the employee doesn't fit well in the company, the employee can be laid off with no liability to the company. If the employee decides he doesn't like the company, he can leave without a penalty.
An employee who can't seem to learn the new job fast enough or effectively enough may find himself looking for a new job. An employee who doesn't fit in at the office may find himself laid off, even if his job performance is otherwise satisfactory. In reality, the company doesn't need to provide a detailed reason for the layoff during this period
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Firing
- Firing is different from a layoff because it is based on employee performance. An employer may fire an employee if she doesn't adequately perform on the job or if she is guilty of misconduct. The company may spell out reasons for abrupt firing in the employee handbook. The employee should be clear on what the company expects and what behaviors lead to immediate termination.
