Do You Think Layoffs and Firings Are Similar? Read To Know The Difference

Last Updated: January 21, 2023, 17:06 IST

Layoffs and firings are two different concepts in the corporate world.

Firings happen as a result of employee’s error, layoff is a decision made by the employer under certain circumstances.

Tech giant Google’s parent company Alphabet Inc on Friday announced that it is laying off 12,000 of its employees, which is around 6 percent of its total workforce employed globally. According to CEO Sundar Pichai, Google witnessed “dramatic growth” in the last two years and hence hired many employees for a “different economic reality” than what Google faces today.

As the world economy has been gearing up lately to normalcy after the disruptions caused by the pandemic, big multinational companies such as Amazon, Meta and Microsoft have been laying off their employees. But, do you think layoffs and firings are similar? If yes, then you need to read further.

Layoffs and firings are two different concepts in the corporate world and being laid off does not always mean an employee’s fault or under performance.

The main distinction between being laid off and being fired is that firings happen as a result of employee error while layoffs are the responsibility of the company. The majority of layoffs occur as a result of cost-cutting efforts by companies. Sometimes, mergers and acquisitions could also be a cause behind layoffs. For example, suppose new management takes over a company, then in order to minimise redundant jobs, the new owner may choose to lay off employees. Such decisions are taken to rearrange the company’s structure and increase cost or operational efficiency.

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Being laid off is different from being fired. Poor performance, failing to live up to the company’s standards, workplace theft or misconduct and violation of company policy, among others, are some of the potential reasons for firing an employee. It’s important for employees to understand if they were fired or laid off when they were terminated. The rationale behind this is that it impacts the chances of a person when they seek employment in future.

If a worker loses his job as a result of cost-cutting measures taken by a company, he can describe the circumstances to potential new employers. On the other side, prospective employers won’t be as eager to provide a position to someone who lost their job due to poor performance in the previous organisation.

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