Wisdom of Mass Layoffs

I often wonder how smart management is when they announce mass layoffs of personnel.

I know the experts among the financial media and journalists are elated when companies sharply pare back expenses. But then again, these observers really don’t have genuine business acumen.

Something is amiss if management has overstaffed to a point where a sudden decision is necessary to lay off thousands of employees in one fell swoop. Forward planning to that point had to have been in considerable error.

Moreover, it’s costly to train lower, middle and then higher management, only to suddenly get rid of them; perhaps soon afterwards, to start new hiring cycles. When times become better, to start hiring new employees from scratch, at great expense. (See the Earl J Weinreb NewsHole® comments.)