When market conditions cause serious reductions in sales and revenues, some companies respond with a serious reduction in staffing. In terms of the big picture, companies have the freedom to lay off employees because of business conditions.
However, in doing so, there are still a number of limitations. For example, a company cannot use layoffs as a means to eliminate employees on the basis of such factors as race, color, religion, gender, or national origin. In terms of warning the employees, the Worker Adjustment and Retraining Notification Act or WARN requires employers with 100 or more employees to provide employees with 60 days written notice if 50 or more employees are going to be laid off.
However, one important exception is that this notification does not need to be provided in the event of unforeseen business circumstances. For many companies laying off employees today, the business circumstances necessitating the cutbacks were unforeseeable and even inconceivable just a few months ago.
At the same time, there are many alternatives to layoffs, and the benefits in terms of productivity, loyalty, and goodwill can be tremendous. These options include reduced workweeks, across-the-board pay reductions, and job sharing, to name just a few. Companies may indeed resort to layoffs, but layoffs are best viewed as the last resort.
| 
