Greater Good · 12 hours ago

How Layoffs Hurt All of Us—and What Companies Can…

When leaders justify layoffs by "reducing headcount," they often assume they're making a sound financial decision-but decades of research reveal something different. Layoffs rarely deliver sustained gains and often undermine the very performance companies seek to protect, with studies showing declines in profitability, innovation, morale, and even customer loyalty that can persist for years. The human toll runs deeper still: layoffs increase the odds of suicide by two and a half times, raise mortality rates, and leave workers earning significantly less even decades later. Yet some companies have found another way-Southwest Airlines once chose to sell a plane rather than cut staff, and Barry-Wehmiller's CEO slashed his own salary to avoid layoffs, decisions that preserved not just jobs but the trust and ingenuity that carried both companies through crisis. As Stanford professor Jeffrey Pfeffer observes, "Layoffs often do not solve what is often the underlying problem, which is often an ineffective strategy, a loss of market share, or too little revenue"-a reminder that the hardest choice and the right choice are sometimes the same.