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09 April 2020 / Report
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Copy LinkThe trajectory of COVID-19 remains uncertain around the world. The Conference Board predicts a deep contraction in Q2 and has a scenario of even extended economic weakness in Q3.Organizations should prepare for these worst-case scenarios, which have high probability. As some businesses shut down to slow the spread of the virus, many more have started various cost-cutting measures to avoid layoffs.1
Why avoid layoffs? Previous research shows that they often result in negative outcomes such as loss of skills, learning, productivity, and innovation; low employee morale; and brand reputational risks,2 as well creating the risk of a slower recovery.3 Knowing this, CEOs at some leading companies (e.g., Morgan Stanley, Citigroup, Visa, FedEx, Bank of America) have taken a stand and committed to not conducting layoffs.4
Although many organizations have decided to keep all employees in the short term, the longer the COVID-19 crisis lasts, the more companies in survival mode may feel compelled to make the tough call. In the US alone, over 16 million people filed unemployment insurance claims in the past three weeks (ending April 4, 2020).5&n
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