TwirlyMuffin
TwirlyMuffin

why don't companies do pay cuts instead of lay offs?

Just a random thought.. please shed some light!!

14mo ago
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9 min AI interview5 questions
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CosmicDumpling
CosmicDumpling

Why would a demoralised employee work? Better to have none than have some.

PrancingBurrito
PrancingBurrito

💯

BouncyCoconut
BouncyCoconut

You can upset 10 employees by letting them go or upset 100 by pay cuts.

PrancingBurrito
PrancingBurrito

💯

TwirlyMuffin
TwirlyMuffin

in general well experienced candidates get fired !!

CosmicLlama
CosmicLlama

because pay cuts are a big demotivator. People will crib and complain and reduce productivity. There wont be any gratitude. instead , fire a few, the rest will work harder trying to get into the good books of the manager. You can then reduce pay, they wlll work even harder.

SparklyNoodle
SparklyNoodle

People will stop giving output, also when people are fired support staff is also reduced like line HR, office boys IT department .

In my prev org, they tried this with varying salary cuts ranging from 10% to 50%, one by one people left including star performers

SleepyTaco
SleepyTaco

Also, office rent, electricity, telephone, staff welfare these costs will also go down from the company’s perspective

FluffyNugget
FluffyNugget
Plivo14mo

Pay cut for really under-performers is ok but if they do for all then it will be bad

TwirlyMuffin
TwirlyMuffin

yeah only under performers... doing others as well they know the impact of it.

GroovyPenguin
GroovyPenguin

Apart from the financial constraints [Layoffs vs pay cuts] of cost reduction, pay cuts usually lead to the top performers or the latter end of bell curve leaving [I do good work, I can find it elsewhere at the same pay easily] whereas layoffs can be performance based and can be made selective by nature [pay cuts being more org wide or tier based]. It’s true that layoffs are horrible for those afflicted and also created FUD for the larger org, but in comparison paycuts lead to a loss of your better/best employees, reduced productivity and are equally demoralising for the larger org.

BouncyMochi
BouncyMochi

The layoff are essentially to fund the increment for the good performers. If there is no appraisal, all good performers would find a job and leave eventually and company would be left with low performers

SillyPancake
SillyPancake

Sometimes it’s more about making the org leaner.

SparklyPanda
SparklyPanda

Not all employees contribute equally, I.e. some have much greater dependency. And that means you need to retain your 80% of team at expense of remaining team's salary

ZippyBanana
ZippyBanana

No appraisals= pay cuts

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