- Business and Employment
The Battle To Stay Employed; Why you treat me so bad?
Understanding The Process
Layoffs in the workplace is something that occurs frequently and is caused by lack of demand for the product or service, overspending from within which inhibits profits, and increased costs of overhead materials.
In most companies when the demand exceeds the supply, business is booming and the company is allowed to grow, produce, and create profits. However, when the supply far outweighs the demand, ‘cuts’, as they’re called become the only way a company can stay afloat. With labor, inventory overhead, and payroll usually being the majority of a companies expense on their profit and loss sheets, an employee may find himself on the unemployment line due to a layoff.
Let’s assume for a second that the demand for a service or product is stable. Another factor that affects layoffs is overspending. Upper level management positions are responsible for keeping a steady flow increase of profits in order to maintain the costs of doing business. Occasionally, a bad investment is made which directly puts the company in a financial challenge to recover from the overspending or lack of return on the investment. Rather then attempt to rebound in a gradual time frame, many companies try to eliminate the initial debt by pulling back it’s payroll levels causing many workers to be put on layoff status.
Finally, economic status and inflation also take a toll on companies and this usually is the most apparent reason that layoff or downsizing in companies takes place. Companies come across increased product costs and materials rates going up all the time. They are faced with the decision to either compromise the product and purchase a less expensive substitute which many are reluctant to do in fear of compromising their initial product or accept the increased production costs and in turn, pass that increase to the consumer. The newest trend unfortunatly has also been to move the business overseas where costs are less, killing our jobs as well. This trickle down economic process is rarely successful since once the domino effect filters its way down to the consumer the demand shrinks because consumers are unwilling to pay the increase costs. In a short amount of time the company must draw back it’s expenses in order to compensate for the reduced sales and again layoffs become inevitable to survive.
Maybe we can teach our senior management team or some of these upper level suit and tie folk the value of clipping a coupon in order to save a buck or two eh?