why don't companies do pay cuts instead of lay offs?
Just a random thought.. please shed some light!!
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.
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
Also, office rent, electricity, telephone, staff welfare these costs will also go down from the company’s perspective
Pay cut for really under-performers is ok but if they do for all then it will be bad
yeah only under performers... doing others as well they know the impact of it.