What is a Company Layoff?

Layoffs, short for economic layoffs, are situations where a labor contract is terminated due to an employer. Refers to the collective dismissal of employees in accordance with the law during the specified period of time by the employer. An enterprise that implements economic reduction of personnel may reduce redundant personnel caused by changes in production and operation conditions.

[cái yuán]

Pinyin: cáiyuán

English: cut down the number of persons employed; reduce the staff

Definition: The layoffs stipulated in China's "Labor Law" specifically refer to economic layoffs, which are situations in which a labor contract is terminated due to an employer. Refers to the collective dismissal of employees in accordance with the law during the specified period of time by the employer. An enterprise that implements economic reduction of personnel may reduce redundant personnel caused by changes in production and operation conditions. ^[1]

Enterprises can reduce staff in two situations: one is on the verge of bankruptcy and has been declared by the people's court to enter the statutory rectification period; the other is that production and operation have encountered serious difficulties and reached local government regulations

Article 40 Under any of the following circumstances, the employer may terminate the labor contract by notifying the employee in writing or giving the employee an additional month's wages 30 days in advance:

(1) Workers who are ill or are not injured due to work and are unable to perform the original work after the prescribed medical period expires, nor can they perform work arranged by the employer;

(2) Workers are incompetent for work, and are still incompetent for work after training or adjustment of work positions;

(3) Significant changes have taken place in the objective conditions on which the labor contract was concluded, which has made it impossible to perform the labor contract, and after negotiation between the employer and the employee, an agreement has not been reached on changing the content of the labor contract.

Article 41 In one of the following situations, if there are more than 20 staff reductions or less than 20 staff reductions but accounting for more than 10% of the total number of employees in the enterprise, the employer shall explain the situation to the union or all staff 30 days in advance. After hearing the opinions of the labor union or the staff, the staff reduction plan may report the staff reduction after reporting to the labor administrative department:

(1) Reorganizing in accordance with the provisions of the Enterprise Bankruptcy Law;

(2) serious difficulties in production and operation;

(3) The company still needs to reduce staff after changing production contracts, major technological innovations, or adjustments to its business methods;

(4) Other major economic changes on the basis of which the labor contract was concluded cause major changes to the labor contract that cannot be performed.

When reducing staff, the following personnel should be retained on a priority basis:

(1) Signing a long-term fixed-term labor contract with the unit;

(2) entering into an open-term labor contract with the unit;

(3) There are no other employed persons in the family, and there are elderly or minors who need to be supported.

If an employer reduces staff in accordance with the provisions of the first paragraph of this Article and re-employs within six months, it shall notify the staff that have been laid off, and give priority to the staff that have been laid off under the same conditions. ^[2]

Article 27 of the Labor Law of the People's Republic of China states: "Employers are on the verge of bankruptcy and undergoing statutory rectification or have serious difficulties in production and operation. If they really need to reduce staff, they should explain the situation to the trade union or all employees 30 days in advance and listen. The opinions of the trade union or employees may be reduced after reporting to the labor administrative department. If the employing unit reduces personnel in accordance with the provisions of this Article, if it recruits personnel within six months, it shall give priority to the reduced personnel. "The" Report "here is only Refers to the description, without the meaning of approval. "Priority acceptance" refers to priority employment under the same conditions.

There are two statutory conditions for economic layoffs by employers, and economic layoffs can be implemented as long as one of these conditions is met:

First, due to serious difficulties in production and operation, it was on the verge of bankruptcy and was declared by the people's court to enter the legal rectification period. The statutory rectification period refers to a restructuring bankruptcy system in which an enterprise adjusts debts and reorganizes enterprises in accordance with the bankruptcy procedures of the Bankruptcy Law of the People's Republic of China and the Civil Procedure Law in order to restore the ability to pay off debts. If the business is not doing well and it is difficult to pay off the debts due, it may be

The benefit of layoffs is that everyone cares about feedback such as complaints, the team is more cohesive, and the execution is effective

There are generally three reasons for layoffs, namely

Take the bank as an example. A person in the personnel department of a bank revealed that the areas where banks are streamlining their staff are mostly low-efficiency, densely populated foreign institutions; from the perspective of staffing, they are mainly low-educated and older workers. The attrition is mostly one-off

When it comes to layoffs, the easiest thing to think of is this company is dead. However, the layoffs of many large multinational companies have made people realize that companies with good performance will also lay off workers on a large scale. Experts said that in addition to poor performance, business adjustments, corporate mergers and acquisitions are also one of the reasons for the company's layoffs.

Layoffs are not embarrassing, understanding doorways is paramount

The layoffs are not abrupt, and there is no trace. Before the layoffs come, you can analyze from various clues whether you are likely to be laid off. When faced with layoffs, don't panic, figuring out the reasons will help you find the right position in the workplace.

Whether to be laid off depends not on your department or the function of your position, but on the company's strategy and market.

In fact, there are two reasons for the laid-off employees. One is that they are not in the core department of the company, and the work they do is not the core work. The work cannot reflect the personal professional value. The second was the layoffs because the company's market, strategy, funding and other issues had nothing to do with itself.

List of most likely layoffs

When you are uneasy here and wondering if you are on the boss's layoff list, don't worry, because most of the time, whether to lay off can be calculated from the input-output ratio of the company to the job, because the labor cost The operating cost is fixed. When the output is high, you will not be cut.

The most secure positions are technical professionals, or experts in a certain field. When they are all laid off, the industry as a whole is shrinking.

Middle-to-high-level employees in foreign companies or employees with relatively high salaries in the enterprise will be more likely to be laid off. The foreign company's company process is clear, and the company's operating process is relatively mature. After the senior managers are laid off, it will not affect the operation of the company, but will save a lot of labor costs. Middle and senior managers with an annual salary of more than 500,000 will be easily cut. After the cut, the impact on the company will be limited. Five employees with a yearly salary of 100,000 can be recruited. In addition, there are senior employees in the company. Employees have worked in the enterprise for ten years or more, but their careers will not develop much in the future, and their contributions to the company will not be particularly outstanding. When the economy is bad, they will be laid off.

When layoffs, do you hear the voice: "Administrators do not generate direct benefits" "Support departments are optional, do not generate benefits and create value." From this point of view, the cost position of the administrative category may be at the forefront of the layoffs. But that is not the case. When the functional department is bloated, this part of the staff will be laid off, but according to my observation, most Chinese companies have not paid enough attention to this kind of functional department, and this part of the post itself will not cause too much cost. A functional post can save the cost of 10,000 yuan a month, and it does not make much sense to cut it. This is because the proportion of this part of labor cost in the total labor cost is too small.

Sales employees depend on the specific company. Most of the sales are based on a commission system rather than a basic salary system. Unless the product of this product is not easy to do or is shrinking the market, sales positions will be cut at this time, otherwise it will not make much sense to lay off sales staff because sales staff The cost is not high.

Workers in labor-intensive enterprises will be laid off because when there are no orders, they are complete cost centers and there are a large number of them. The boss will not keep the workers waiting to start without orders and no production.

In fact, layoffs are about strategy, not about functions.

What to do after layoffs

The reason for the layoffs of enterprises is that they have no confidence in the future development, which includes not only the employees who have been laid off have no effect on the future business development, but also the contraction of this part of the business.

Take the group buying website as an example. From 2010 to 2011, the group buying website was hot. Although the industry recognized that group buying websites were burning money and invested a lot but did not make money, the major group buying websites were still hiring in large numbers because the group buying websites had great expectations for the future Well, I hope to expand the market size through mass recruitment.

By the end of 2011, group-buying sites began to lay off staff. Because they still had not found a clear profit model, they had to shrink costs. First, they began to shrink from those unimportant and non-core parts. , The corresponding employees are also abandoned.

The layoffs represent the abandonment of these employees, and the company will not lay off staff until the business of the company has fallen to a certain level. What we are seeing is more about stopping or reducing hiring and optimizing internal staff rather than cutting staff directly. In fact, it is not embarrassing to encounter layoffs, nor does it need to increase the burden on your career, because the company's strategy, market, or funding issues have dissolved this department.

If you have been in a company for a long time and have good qualifications in the industry, it is easier to find the same position after being laid off.

However, it s important to note that after encountering layoffs, when choosing your next job, you must first analyze why this happened in the company before. Do nt choose the next job similar to this job because you I certainly don't want to go through the same layoffs again.

For example, a friend made a mold for a product, but later, due to environmental protection and other reasons, this mold was gradually cancelled in the industry. After the first company was cut off, the person s reputation in the industry has been It was good, so I quickly found another job with the same content, and then was laid off a second time. Because it is the sunset industry, companies in the industry have been shrinking this part of the job.

When encountering the situation that the sunset industry was laid off because of shrinking the market, it is not a bad thing to choose a career change. Except for purely technical positions, most positions can be changed. It is more difficult to switch to a technical post after 5 years of work, but again, in general, technical posts are not easy to be laid off unless this technology is eliminated.

Take the group-buying website for mass layoffs as an example. After being laid off, you can go to other Internet companies, but when looking for your next job, you should pay attention to no longer choose Internet companies whose profit models are unclear and very costly.

When those well-known foreign companies are faced with layoffs, they can carefully choose to go to some small private enterprises as managers. In fact, the working atmosphere, corporate culture and organizational processes of well-known foreign companies are very different from some small private companies.

The position is not just a simple TITLE and salary. It includes too much content such as assessment, authority, report object, company organizational process and so on, which determines how well you are doing in this position, and it is mostly determined by these reasons.

Regarding the severance pay after the layoffs of foreign company executives, unless you have an agreement with the enterprise when you join the company, compensation will generally be made according to the Labor Law, and there will not be much change. In fact, when you encounter layoffs, no matter if you choose to start a business, re-employment or recharging, the longest time to leave the workplace should not exceed one year, and it is a more appropriate time to leave the workplace within six months.

No matter how small the business shrinks, you can create value for the business, and the value you create can be bought, then the business will retain you, even if the department is removed, it will still transfer you away.

Although layoffs are a strategic option for companies to improve their cold resistance and recover quickly, layoffs are not just a matter of providing employees with psychological comfort and not violating the Labor Law.