Layoffs or pay freezes?
Our company is in some financial trouble and there’s no way around making cuts regarding employee pay. We are still mulling over our options--namely, whether it’s best to select employees for layoff or to institute a freeze on everyone’s pay. Obviously, we’ve got some number-crunching to do (including determining whether we can function efficiently with fewer employees should we choose layoffs).
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In the meantime, I thought I’d ask--all things being equal, in such a situation do you think it’s better to just layoff some employees and keep the “survivors” relatively happy by not instituting pay freezes?
Or would it be better to send the message—“We’re experiencing tough times: the good news is we are going to be able to avoid layoffs (underscoring that all of our employees are important to us), but the bad news is we can’t afford to give you raises?”
Any insights--particularly from those of you who've been in such a situation before--would be most appreciated! Thanks