With the economy slowing down, companies say they are laying off employees to trim excess staff, restructure/refocus activities, and put future growth ideas on hold. While layoffs now make sense because the first quarter is a seasonally slow period, there are four questions that need answering for investors to understand what comes next.
Question #1 – Why layoffs now?
Usually, companies prefer to shift workers elsewhere. After all, they are loyal, committed and proven employees – plus, it’s the humane thing to do. Add to that today’s ongoing challenge to hire qualified newcomers, and it seems the smart company action to take. Therefore, terminating hundreds or thousands in one fell swoop is a red flag that raises this question to the top for investors and the media.
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