You may have heard the expression, “Don’t throw away the baby with the bath water”. This is a saying we may want to keep in mind when considering layoffs during this Covid-19 crisis. If we are at this crossroad, here is an example we may want to keep in mind.
In their 50-year history, Southwest Airlines has never laid off a single employee. Remarkably, they have also made a profit for 46 years in a row. When Southwest faces an industry-wide crisis, layoffs are the last thing they do. For many companies, it is the first action taken to cut expenses. Who is right? That is a judgment call. If we want to operate a business that makes a profit for 46 straight years, maybe we should tune in to Southwest’s philosophy about layoffs. Here they are, as outlined in a Business Week article in October of 2001:
Consequences of layoffs:
Severance and rehiring costs
Potential lawsuits from aggrieved workers
Loss of institutional memory and trust in management
Lack of staffers when the economy rebounds
Survivors who are risk-averse, paranoid, and political
Benefits of not laying people off:
A fiercely loyal, more productive workforce
Higher customer satisfaction
Readiness to snap back with the economy
A recruiting edge
Workers who aren’t afraid to innovate, knowing their jobs are safe.
As illustrated in these bullet points, if we are considering layoffs, this situation should be carefully weighed so that we don’t look back and say “OOPS!”
