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Effects of Downsizing on Job Satisfaction of Existing Employees

Table of Contents


Concept of Job Layoff.

Situations Driving the Companies to Take the Strategy of Job Layoff.

Impact of Job Layoffs Over Employees.

Emotional Impact of Job Layoff and Job Security.

Social Impact of Job Layoff.

Unemployment and The Influence of Job Layoff in Australia.



Introduction to Job Layoffs and Its Effect on People

Employment is one of the major factors which is tagged with the macro environment of a market and is directly associated with the economic condition of the entire population of the market. It has been identified that the market having better scope of employment always gets an escalation towards better levels of economic growth and stability. This stability is directly tagged with the scope of employment and job security as well. It has also been pointed out that, there are certain factors which disrupt the stability of employment among which job lay off is prior to be noted. This report should outline the basic concept and driving factors which triggers job layoff in the market and its impact over people. The purpose of the report is to identify the cause and impact of job lay off at the Australian community and especially the impact of job layoff over the employees of the local , national and multinational houses working over on the mentioned nation. The scope of this study is that it should help to identify the root cause associated with the job layoff at the market of Australia and the impact of the same over the emotional and financial condition of the suspended and jobless population of the country. With the stability of job and income, the psychosocial behavior of the individuals is modulated and the scope of analysis of the same for the Australian people has been provided by this report. In the subtopics of this paper, the different spectrum of the impact of job layoff like, emotional impact, financial impact, social impact has been focused which has helped to get a whole imdea about the influence of the issue of suspension or job layoff over people. The methodology of this paper has included only the secondary sourcing of data for analysis. However, both the qualitative and quantitative information has been considered to explain the cause and effect of the mentioned issue most conspicuously.

The thesis statement of this study states that job layoff has a direct and negative impact over people.

Concept of Job Layoff

In the introduction section, the relationship of job layoff with that of employment stability has been mentioned. Now, in this section, the central idea of job layoff should be stated. As per the research of Mukoyama, Patterson ?ahin (2018, p. 208), job layoff has been defined as the temporary suspension or permanent termination of an individual or group of employees at a time for single or multiple reasons. On the contrary , as argued by Andersson et al. (2018, p. 203), the reason for job layoff should certainly be tagged with the business or the commercial activity. From this angle, it can be analysed that there is a semantic difference between job cart and job layoff. In the case of job cuts, the abrupt termination of the employees takes place which may or may not be associated with commercial activities of the organisation.

The research regarding this subject has further revealed that the analysis of employee performance is always done in the commercial organisations by various levels of hierarchy and the employees with low level of productivity often face the threat of suspension. As per the viewpoint of Brand (2015, p. 359), temporary suspension in the employment is the major fact represented by job layoff. For example, Woolworths is one of the major retail supermarket chains of Australia has developed its workforce by employing 115,000 individuals who have a strict code of conduct which may invoke termination of employees. However, this can not be included in the spectrum job layoff. On the other hand, this house ensures job security for the employees of not only the Australian market but also for the market of Abroad. However, the practice of job suspension is prevalent in the Australian market just like any other countries of the globe.

Situations Driving the Companies to Take the Strategy of Job Layoff

Financial crisis- This is one of the primary causes which triggers the managerial bioard of a commercial organisation to take the decision of job lay off. As per the viewpoint of Parsons (2019, p. 370), with the issue of repeated loss or minimisation of the profitability of an organisation, the frequency incidence of job lay off is noticed. Hence, from thi angle, it can be analysed that the company loses the ability to pay the employees which triggers them to lay off the workers. Aurangzeb & Shah (328, p. 136) has added that the issue of cost reduction is associated with the same. Companies often reduce the working cost in different periods. The trend of boom and lean season in business is nothing new and is applicable for each and every market. In this context, Mondy & Martocchio (2016, p. 226) has commented that the commercial organisations need more employees at the pick or boom season while the labour demand gets decreased at the learn season. Hence, in the lean season of business, the company authority suspends the majority of the employees to reduce the operating cost and the financial burden of the organisation. It can be analysed that employment layoff is a strategy or tactics of the commercial organisation to minimise or curtel excess casting to maintain the HR. However, this imparts immense negative impact over financial and social existence of the employees and the reputation of the company as well. However, in this case, the act of temporary suspension is quite more common than that of permanent termination of the employer. Hence, from this angle, it can be mentioned that the employees get a chance to get back their job hihc is certainly annoying for them

Worker redundancy- Often commercial houses take the strategy to concise the commercial activity and staffing. This factor triggers the activity like job layoff, which helps to minimise the number of staff of the organisation. As per the viewpoint of Chinomona, Popoola & Imuezerua (2017, p. 30), in multiple cases, the issue of over staffing is identified at these multinational organisations which invokes a major cost burden to manage the regular commercial activity of the company. Hence, from this angle, it can be mentioned that job lay off, suspension or termination is one of the ways out to minimize the issue of overstaffing. However this imparts majorintability to the people of the organisation. Additionally, Mondy & Martocchio (2016, p. 334) have stated that the policy of outsourcing is highly noticed in major companies in which the practice of accountability transfer of different departments of a business organisation to the other one is noted. Hence, the adoption of the outsourcing strategy often leads to the termination or suspension of the employees of a particular department of a commercial organisation. This factor not only has invoked the issue of job layoff but also has minimised the scope for employment and new recruitment as well.

Merge or acquisition- The employment layoff or permanent job cut id tagged with the event of merger and acquisition. When a company get merged with the other one, in many cases, the employees of the company get laid off for different reasons. During the merger of Procter & Gamble, about 6000 of employees have been laid off and this is one of the finest examples of the job layoff due to merger and acquisition. Aurangzeb & Shah (2015, p. 132) has criticised this type of activity and have commented that merger and acquisition is a decision taken by the managers and this should not impact the employees of the companies. Hence, from this angle, it can also be mentioned that the cause of job layoff is not always associated directly with the person or the persons who are getting terminated or suspended.

Evaluation of employee performance- the performance and productivity of employees are always been evaluated by the managerial personnel. The deterioration of the productivity of the employees invokes the minimisation of agility of the company and decrease of the speed of the commercial activity of the same. This imparts a negative impact over the financial growth of the company. Hence, in order to bring consciousness among the employees of the organisation, the strategy of job layoff is often implemented.

economic depression or social issue- The economic depression or social issue may take place in any context. For example, the outbreak of COVID 19 has called on economic depression in each and every market which has reduced the GDP growth of the same. Hence, this type of condition triggers the lack of flow of the financial resources to the business of any commercial organisations. This may lead to no other option but to imply job layoff in order to minimise the cost burden and to minimise the expected financial loss of the house.

Impact of Job Layoffs Over Employees

Job layoff has a multidimensional impact on the people and employees of a house. Lu et al. (2017, p. 28) has stated that job security is primarily disrupted with the event of job layoff. This is the main factor which curves out the financial instability of people. Fujita & Nakajima (2015, p. 15) has stated that financial stability and security is tagged with the income of a person. Further Görg & Görlich (2015, p. 536) has mentioned that the financial stability or strength determines the purchasing power of an individual at the market. Hence, from this angle, it can be mentioned that with the issue of job layoff, the purchasing power of the population of the market gets disrupted and decreased. Hence, it can be analysed that not only for the people, but also for an entire market, an economic imbalance may take place. Brand (2015, p. 362) has researched on the issue of job cut and job layoff and have opined that the stability of family life also gets hampered with the implementation of job layoff. The source of income of the employees gets hindered with the issue of temporary suspension or the permanent termination. This creates a hindetence in earning or the regular income of an individual. This is one of the major and most dominant negative impacts imparted by the mentioned issue over the people.

In the case of temporary suspension, the employees are not permitted to work for the other organisations. Hence, from this viewpoint, managing personal life gets quite critical for people. This is another problem which is often faced by the employees who have been laid off by their organisations for a temporary basis. Andreeva et al. (2015, p. 1045) have stated that the situation gets more critical for the aged employees. The employees with age above 35, have to face more crisis than that of younger employees in the case of temporary or permanent termination. In the major cases, the younger employees are able to manage a new job while there is age restriction or the age bar for the application of jobs in a few countries. Hence, for the aged person, it is really quite critical to manage a new job. Moreover, they have to negotiate on a lower pay scale than that of their previous job which also creates mental dissatisfaction for the aged employees. Hence, from this angle, it can be mentioned that , along with the financial crisis, the employees have to face psychological risi as well with the issue of job layoff.

Emotional Impact of Job Layoff and Job Security

With the termination or suspension, a deep negative influence is imparted over the mind of employees. This often triggers the occurrence of heavy mental depression. Michaud, Crimmins & Hurd (2016, p. 198) has stated that in a few cases, people with a job layoff, lose their self-confidence and this turns them more inactive and psychologically depressed as well.

The rate of suicide is fluctuating in Australia and in this content, job loss and unemployment has a prominent role.

The above graph is showing that the rate of unemployment should touch 8.9% in 2021 which is the highest among the last 10 years (statista, 2020, Para. 1). Hence, from this angle, it can also be mentioned that depression and self-harm should also get increased and job layoff should have a prominent role behind the same. The social need and security, which is associated with the need hierarchy of human beings, get disrupted with the issue of job layoff and unemployment. Henc, this turns the young lives more psychologically vulnerable. It has also been noticed that the rate of psychological pain and agony is quite grater in the case of unemployed male than that of female employees. Hence, this factor should also be considered while evaluating the negative impact of job layoff over the people.

Social Impact of Job Layoff

In the previous sections, it has already been mentioned that job layoff invokes social crises. As per the viewpoint of Maak, Pless & Voegtlin (2016, p. 472), social factors are deeply involved with the macro-environment of business of a market. Hence, the issue of employee suspension or termination has a direct relationship with the social factor. The suspended or terminated employee has to face social distress and this imparts an emotional stress over them (Davis, Trevor & Feng, 2015, p. 1434). Hence, from this angle, it may be analysed that both the company and its people have to face negative impact from the issue of job layoff.

In recent times, the development of a diversified workforce is a new trend which helps immensely in the management of cross-cultural business. As per the idea of Yang & Zheng (2015, p. 490), the majority of the multinational colonies are promoting different unique strategies to handle the diversified workforce which includes the promotion of job security, equality and respect towards each other. Hence, from this angle, it can be analysed that with the issue of employee suspension or termination, the management of a diversified workforce can get into a crisis. The differentiation among the employees of the same workforce gets started with the implementation of the strategy of job lay off and this can invoke a major challenge for the promotion of equality within the workforce. For example, suspension or termination to an employee of a specific ethnicity can invoke such a thinking which may indicate that the company has a perciality toward a certain race or ethnicity. As per the idea of Dhanani, Beus & Joseph (2018, p. 162), the feelings of workplace discrimination is highly against the corporate culture and this may create hinderence towards the corporate governance of the renouned houses.

On the other hand, the job lay off often gets associated with female employees of an organisation. This imparts a deadly blow over the social image of the corporate house in the operating market. Gorbacheva et al. (2019, p. 45), has researched and mentioned that gender imbalance or gender discrimination in the professional space, is one of the major factor which has been noticed in the recent time. Hence, job cut or job lay off for the female employees invokes the social issue of gender bias and this deteriorates the social image of the brand at the market. From this angle, also it can further be analysed that with the incidence of the job lay off for the female employees, the financial and social instability of the women workers get disrupted. It can be mansions that this invokes major hindrance in women empowerment and women independence as well.

From the above graph it can be interpreted that the majority of the female job layoff at the Australian market has happened in the retail, food, arts and recreation sector. Hence, from this angle, it can be analysed that the issue has imparted a negative impact over the social and financial stability of the female employees of the country.

Unemployment and The Influence of Job Layoff in Australia

In the previous section, the issue of social crisis and its relationship with job layoff has been mentioned. This is applicable for the market of Australia and this has happened for the outbreak of COVID-19. Taylor (2020, para. 4) has reported that about 20,000 employees of the Aviation industry , especially of Qantas, have been laid off as they have no job to perform in the mentioned organisation with the suspension of national and international flight service. Hence, this is an immense pressure over the unemployment aspect of the market. It can be analysed that the social, psychological and financial stability of the mentioned figure of individuals have disrupted the issue of job layoff.

However, Woolworth of Australia has taken a positive step to prevent the negative impact of job layoff in the pandemic condition of COVID -19. This should imart a positive impact over the financial depression of the country in such an emergency situation. As per the official report of Thorn (2020, Para. 1), joint initiative has been taken by Qantas aviation and Woolwoths and it has been mentioned that the laid off employee may work in the house of Woolworth at the emergency situation of pandemic. From this point, it can be analysed that Woolworths have a high ethical standard and have a well-structured CSR policy to manage the crisis of the community of the Australian market. The report of Thorn (2020, Para. 2), about 150 aircrafts of the Qantas is not flying regularly which has triggered most of the employees of the company as jobless and these employees have been redeployed by Woolworths in new job roles. Hence, from this angle, it can be analysed that social crisis often invokes the issue of job layoff which can be managed with effective business policy and inter-house partnership. Additionally, it can also be mentioned that the social burden of job loss can be efficiently managed with the unique idea of Woolworths in the Australian market.

The job layoff or suspension for women employees is taking place more than that of men in the social context of Australia. This is one of the major facts of concern. As per the report of Taylor (2020, Para. 4), the female employees of Australian market have been facing greater job termination and the rate is about 8.1 precent which is about 6.2 precent for the male employees. Hence, from this angle , it can be analysed that the economic and social independence of the female population of Australian community is getting hindered. Nekoei & Weber (2017, p. 532) has researched and mentioned that there is an quintessential concept regarding the earning of female individuals and it is always considered as the additional income of a family. This often triggers the suspension of the female employees in frequent numbers than that of the male employees at the professional field.

The data of Australian Bureau of statistics have proved that the percentage of job layout of the female employee is higher irrespective of age than that of male employees and this has invoked gender imbalance at the Australian professional and commercial field. It has been estimated that about 325,000 female employees have been suspended and terminated for the economic crisis in the commercial iled of Australia which has decreased the female working hours to 11.5% which is quite higher than that of male individuals at the professional sphere (7news, 2020, Para. 5). Hence, from this angle, it can be analysed that in case of any crisis, the gender imbalance and suspension of female employees are firstly opted by the organisations. This imparts immense negative impact over the progress of the female community in the professional sphere and hinders the economic independence of the same. Hence, from this angle, it can also be analysed that , the fact of unemployment of Australia is also tagged with the job layoff and the termination or suspension of the female employee innately associated with the same.

Conclusion on Job Layoffs and Its Effect on People

At the end of the study, it can be concluded that, Job lay off always imparts a negative impact over the social, psychological and financial stability of people. Hence, from thi angle, it can also be concluded that the thesis statement of this study has been met through the entire discussion and analysis of this report. It has been identified that there are multiple factors which triggers the issue of job layoff. The financial crisis of the companies along with the decision of employee redundancy is directly linked with the implementation of job layoff. However, there was a semantic difference between job cut and job layoff. The issue of job lay off is tagged with the temporary suspension of the employment which is not associated with job cut. It has been identified that female employees have suffered more in the context of job cuts than that of male employees. This has invoked gender imbalance, the issue of self-harm, depression is tagged with the emotional aspect of job layoff and unemployment.

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