Layoffs can happen for various reasons such as a company’s financial struggles, downsizing, restructuring, or changes in business strategy. When a company decides to layoff employees, it’s a challenging and stressful time for everyone involved. In such circumstances, it’s natural to wonder who gets fired first in layoffs.
The answer to this question is not straightforward, and it depends on several factors. However, some general trends and patterns can help us understand the typical scenarios.
- Last Hired, First Fired (LHFF)
One common practice that companies follow while laying off employees is the “last hired, first fired” (LHFF) approach. Under this approach, the employees who joined the company recently, or the ones who have the least seniority, are the first ones to be laid off. This method is often used because new employees are less experienced and may have less knowledge of the company’s operations, so their absence may have less impact on the company’s functioning.
Additionally, new employees may not have developed relationships with clients, customers, or vendors, making it easier for the company to terminate them. LHFF approach may be used in the absence of any formal system for evaluating employees, but it can lead to high turnover rates and may be demotivating for newer employees.
- Performance-Based Layoffs
Some companies may decide to lay off employees based on their performance rather than their seniority. In such cases, the employees with poor performance evaluations are the first ones to be laid off. This approach is often used to ensure that the best-performing employees remain in the company, allowing the company to continue to perform at a high level even after the layoffs.
However, this approach may be challenging to implement as it requires objective performance evaluations, which can be subjective and controversial. Moreover, the system for evaluating performance may be biased, leading to the termination of employees who are not actually underperforming.
- Skillset-Based Layoffs
Companies may also lay off employees based on their skillsets or job functions. In such cases, the company may determine which job functions or skillsets are no longer required or in demand and then lay off the employees in those areas. This approach may be used to ensure that the company retains employees with essential skills and knowledge while reducing costs by eliminating redundant positions.
However, this approach may be challenging to implement as the company must have a clear understanding of which job functions or skillsets are no longer required or in demand. Additionally, it can lead to significant skill gaps in the organization, which may be challenging to fill in the future.
- Voluntary Layoffs
Some companies may offer voluntary layoffs to their employees, where employees can choose to leave the company in exchange for severance pay or other benefits. In such cases, the employees who opt for voluntary layoffs are the first ones to leave, followed by those who do not opt for them.
This approach is often used to reduce the number of employees without resorting to involuntary layoffs. It also provides employees with some control over their future, as they can choose to leave the company on their terms.
- Combination Approach
Most companies use a combination of the above approaches while laying off employees. For example, the company may use LHFF to determine the first set of layoffs and then use performance evaluations to determine the subsequent set of layoffs. This approach ensures that the company retains the best-performing employees while reducing costs.
However, this approach can be challenging to implement as it requires a fair and transparent system for evaluating employee performance, which can be challenging to achieve.
In conclusion, who gets fired first in layoffs depends on the approach that the company chooses to follow. While the LHFF approach is a common practice, companies may also lay off employees based on their performance, skillsets, or offer voluntary layoffs.