Our Leaders Are Just Dumb

From Greg Linden’s blog:

There is no solid evidence that using layoffs rather than less draconian methods to cut costs increases performance, and there is plenty of evidence that involuntary reductions in force damage both displaced workers and “survivors”.

A University of Colorado study … showed no link between downsizing and subsequent return on assets. A Bain study … found that … firms that used layoffs primarily for cost cutting suffered a drop in stock price … A Right Associates study … reported that layoffs were followed by lower employee morale and trust in management.