Question: Do We Have to Cut Jobs to Reduce Costs? Some companies are trying unusual tactics to downsize their workforce without the drastic job cuts that result in "survivor" syndrome for the remaining employees. Vermont's Rhino Foods, maker of the cookie dough for Ben and Jerry's ice cream, sent 15 factory workers to a nearby lip balm factory to help with the holiday rush. The employees were paid by Rhino, which then billed the factory for the hours worked. Nucor Steel has cut time in the factory for its hourly employees. On the days they are not in the factory, employees are paid their base salary to perform maintenance work or to take classes.
Luxury Retreats, a villa rental agency, decided to help train existing staff to learn more skills by moving employees from product development to sales areas rather than hiring new employees. Ernst & Young gave 9,000 of its mainland China and Hong Kong employees the opportunity to take one month of unpaid leave during the first half of 2009. Almost 90 percent of the firm's auditors agreed to take the unpaid leave. Why would companies put in the time and effort to develop alternative strategies in order to avoid cutting jobs and laying off employees? Consider economic reasons as well as social responsibility. Do you think that companies should avoid layoffs at all costs? Can job losses and layoffs ever be beneficial for companies? For employees? Can training and development help reduce or eliminate the need for layoffs? Explain the rationale for your answers.