There will be layoffs in the next three years. Don’t fall into this “trap”

In the current complex and changing economic situation, layoffs have become an option considered by many companies in order to survive and reduce costs. But is layoffs really the best solution to the problem?

The overall environment is not good, and companies are trying to survive.

However, blind layoffs will instead trap the company in a "spiral of destruction" and accelerate its death.

Some time ago, I took my whole family to a nearby steam room. There are 4 floors with food and drinks, a children's playground, a steam room, a swimming pool, a restaurant, an entertainment theater, a game room, a lounge, etc. The environment is clean and the service is thoughtful, so we can always stay there for a whole day.

But when I went there last month, I noticed changes. There were fewer waiters in the hot spring area on the second floor, and the floor was wet and not as clean as before; the place where dry towels were previously placed in the steam steam room on the third floor was no longer provided and was empty; some facilities in the steam steam room were damaged and not repaired in time; the bathroom entrance was not as clean as before; the garbage on the small table in the hall was not cleared in time, and there were obviously fewer waiters on site.

I can probably guess some of the reasons.

Later, when I went to the internal supermarket to buy something, I chatted with the waiter and learned that business had been bad since March and the company had laid off some people.

In the past, people had to fight for seats on weekends, and it was crowded. Now, even on weekends, it is deserted. For example, today on the weekend, it is already noon, and there are less than 100 people in the whole sauna hall, which can accommodate 5,000 people.

I also found that the age of the cleaners has changed. I used to estimate that they were ladies around 40-50 years old, but this time I saw some energetic old people over 60 years old with gray hair. I think their wages are lower.

Obviously, the sauna is cutting costs and laying off employees (including replacements). But after the last time, I no longer have any interest in going there. The reason is very simple. After they laid off employees, the service and experience have obviously declined, and the environmental sanitation and garbage cleaning have made me feel that the experience is not good.

The sauna itself is a service-oriented, public place.

Service, experience, hygiene and safety are its foundation.

I believe there are many old customers who feel the same way as I do.

Later, I went to Dianping to check the reviews and found that there were more negative reviews this year.

Therefore, the purpose of cost reduction and layoffs is to survive, but blind operation will easily lead to the loss of old customers and reduced income.

This is not worth the loss. (Maybe the boss has made enough money and is planning to close the business when the rent expires. It was really popular before)

So what is the key to reducing costs by laying off employees? In fact, it is about making choices and finding a balance.

On one side is business survival, and on the other side is customer value (service/experience).

So at this time, we need to figure out what core services and products the company is providing?

Where is the core delivery link?

Will the customer experience be significantly affected after layoffs?

If these issues are not thought through and plans are not made in advance, and if employees are laid off blindly, it is easy to end up like I did in the sauna.

If I were the person in charge of a sauna, I would definitely not remove the provision of dry towels in the lobby, because towels are needed after the sauna. If I wanted to reduce costs, I might have two options:

First, reduce the number of towel placement points, concentrate the supply at one location, and distribute the towels in different time periods;

Second, remove the original placement point and remind customers that if they need towels, they can get them from the front desk staff.

In short, control the quantity, reduce waste, and lower the cost of collecting and washing towels.

But now, saunas are directly reducing staff, services, and experience, which is actually accelerating themselves into the "spiral of destruction" trap. If they continue like this, they will go bankrupt. (As shown below)

If you really want to lay off employees, there are a few things that companies should pay attention to:

1. Minimize layoffs in core delivery business segments;

2. If there are fewer people, consider focusing on serving high-value customers, and don’t ask for everything;

3. Before layoffs, evaluate the service and experience of the core delivery links and make plans in advance to reduce the harm to old customers;

4. Proactively inform customers of changes in services and experiences, and manage customer expectations in advance.

In short, don't lay off employees blindly.

I can especially understand that layoffs bring short-term financial effects and relieve financial and management pressures. A company with a long-term orientation must think carefully and think twice before acting.

Of course, the best way is always to prevent the company from walking on the edge of a dangerous cliff.

This requires operators to assess the situation and have foresight into the future.