The Tower of London to Axe Jobs

Everyone knows that we are going through a global pandemic. 

And so, the coronavirus brings the pain of job loss and cut salaries because companies, big and small, will focus to stem losses, the need to make it through the crisis. At least, that’s what employees are told. 

In fact, most times, layoffs are preferred than salary cuts. 

If you must know, layoffs have become a default response to an uncertain future. Whether it is because of the coronavirus or a world that is regularly disrupted by rapid advances in technology, tumultuous markets, and hyper competition, companies will resort to lay off staff. 

But don’t blame Covid-19 per se. 

A McKinsey survey of 2,000 US companies found that from 2008 to 2011 (during the recession and its aftermath), 65% resorted to layoffs [“An economy that works: Job creation and America’s future”, James Manyika, et al, McKinsey Global Institute, June 2011]. 

That is today’s reality. When the economy gets hit, jobs get hit.

Still, companies should think twice. In a 2012 review of 20 studies of US companies that had gone through layoffs, Deepak Datta at the University of Texas at Arlington found that after layoffs a majority of companies suffered declines in profitability. (A related study showed that the drop in profits persisted for three years). Besides, layoffs had a neutral to negative effect on stock prices in the days following their announcement. 

And a team of researchers from Auburn University, Baylor University, and the University of Tennessee found that companies that have layoffs are twice as likely to file for bankruptcy as companies that don’t have them. 

Layoffs can cause employees to feel they’ve lost control: The fate of their peers sends a message that hard work and good performance do not guarantee their jobs. 

A 2002 study by Magnus Sverke and Johnny Hellgren of Stockholm University and Katharina Näswall of University of Canterbury found that after a layoff, survivors experienced a 41% decline in job satisfaction, a 36% decline in organizational commitment, and a 20% decline in job performance. 

Methinks, layoffs are so embedded in business as a short-term solution for lowering costs that managers ignore the fact that they create more problems than they solve. 

And those companies that boast "Employees First" should slap themselves hard if they choose this easy way out. It must be mentioned that employees who are downsized pay a price beyond the immediate loss of their jobs. 

Wayne Cascio, a professor at the University of Colorado, points to the US Labor Department’s survey of workers who were laid off during 1997 and 1998, an economic upswing. Most were worse off a year later: Only 41% had found work at equal or higher pay, 26% had found jobs at lower pay, and another 21% were still unemployed or had left the workforce entirely. The effects follow people throughout their lives. 

A 2009 Columbia University study that looked at employees who had been laid off during the 1982 recession showed that 20 years later they were still earning 20% less than peers who had kept their jobs. 

The aftershocks aren’t limited just to earnings: According to a study by Kate Strully, an assistant professor at SUNY, laid-off employees have an 83% higher chance of developing a new health condition in the year after their termination and are six times more likely to commit a violent act. 

Anyway, I digress. SORRY! 

On Monday, I read that UK’s well-recognized Beefeaters (the affectionate name given to what are more formally known as the Yeomen Warders, the ceremonial guardians of the Tower of London) are reportedly facing redundancies for the first time in 500+ years! 

There are just 37 of them – they are veterans with at least 22 years’ military service – and even then, the powers that be are wanting to cull an indeterminate number. 

FYI, the iconic Tower – a 900-year-old castle and fortress in London that is notable for housing the crown jewels and for holding many famous and infamous prisoners – welcomed 3 million visitors last year. 

But now it can welcome less than 1,000 guests each day due to social distancing rules. The site only reopened for the first time on July 10 after closing amid the pandemic. 

I’m just kinda sad.