7 Alternatives to Layoffs

Layoffs are happening as the world ponders whether a global recession is coming. Whatever label people end up putting on this era, companies are struggling with consecutive lackluster quarters, inflation, price hikes, and uncertainty. Varying interest rates, a plummeting stock market, and a downturn in consumer confidence are only making matters worse. 

As a result, many HR leaders have begun thinking about or executing layoffs. Netflix, Peloton, and Ford are among those companies that have recently laid off talent. All over LinkedIn, users can see friends, colleagues, and associates, who are now open to work after being among those who were let go. They share sad tales of layoffs.

READ: 10 Strategies for Dealing with Layoffs

Whether the HR department conducts the layoffs with kindness or cruelty, the ending result is the same. People have lost their jobs, and companies, often the ones that need the most help, are left with a shortage of workers. The morale of those employees who remain drops as they become overworked and anxious about the future.     

Here are some alternatives to layoffs that may help HR avoid all the drama: 

Remote Work

Thanks to the pandemic, most, if not all, companies with knowledge workers are now set up for remote work. By getting rid of leases or selling off property that was used for office space, employers can free up funds, which will allow them to pay salaries. This is not possible for businesses that offer products or services that require in-person work at a physical location. However, it is one way to free up funds for those whose work permits a remote workforce. 

INTERVIEW: RTO or WFH: Which Will Win?


A furlough is when workers are sent home for a period of time, so employers can get a break from paying them. The Walt Disney Company furloughed a number of cast members, who work at its theme parks, at the start of the pandemic because the parks had to close. Ideally, employees who are furloughed get invited back to work – for pay – within a couple of weeks or months at most. The point is that businesses get a break from paying, but the worker does not lose his or her job forever.  

READ: Are HR Leaders Facing a Recession?

Job Sharing

Job sharing is a process in which two or more employees work part-time or reduced hours to accomplish what might have been the job of one full-time employee. As a result, the business pays each less in both compensation and benefits than it would have to pay the one employee. Job sharing was once also considered a way to get working moms back to work because of the reduced hours. 

Cuts in Benefits and Perks

Rather than laying off people, employers can simply cut benefits and perks during lean times. In response to a possible recession, people stop offering free food, subscription services, and the like. Just like moms combing through monthly payments to find ways to save, employers can take a fine-tooth comb to their spending and cut the fat. 

Hiring Freeze

Many companies that are laying off people are still hiring at the same time. It is a bad look. Employers should have a hiring freeze to save money and stay on budget. Google recently announced a hiring freeze that was meant to last until early August and was extended further.

Sundar Pichai, CEO of Alphabet, Google’s parent company, warned that hiring would slow down for the rest of the year. Some employees fear their jobs could be on the line, too, according to tech.co. Still, Google is starting with a hiring freeze aimed at keeping costs down as it grapples with a war between Ukraine and Russia and record-high inflation.  

READ: Should You Transition to a Four-Day Work Week?

Four-Day Work Week

When people think about lean times, they imagine doing more with less. They expect cuts and inconveniences. However, offering a four-day work week or shortened work week allows companies to pay less to both salaried and hourly employees. The fact that it can be packaged as a work-life balance benefit is a bonus. In the wake of the pandemic, many companies, including ThredUp, are testing this concept as a means of fighting burnout. So, it may help solve two problems at once.

READ: 6 Ways to Help Employees Combat Burnout 

Cut Freelancers and Contract Workers

Employers have the option of breaking ties with freelancers and contract workers at a drop of a hat. (The freelancers can do the same, and they know they do not have the same kind of job security as a full-time employee.) Bringing this work in house may increase the to-dos of employees, however it can keep them employed because of the potential savings. 

READ: Pros and Cons of the Gig Economy

Early Retirement Packages

Another popular tool companies use to avoid layoffs is offering early retirement packages to older workers. This can sometimes be seen as cruel or insensitive, however, there are some workers who long to get out of their full-time gigs to pursue passions, focus on family, or simply move on to another phase of their life. Companies can seek volunteers for early retirement and offer some incentives to get them off the payroll. 

Photo by Marcus Aurelius for Pexels

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