Knowledge@wharton

When Circuit City announced last week that it was laying off 3 400 workers so it could rehire new ones at lower salaries it raised the question of just what strategic benefits the company -- or any company -- expects to achieve through employee downsizing. Clearly these benefits depend on the underlying strength of the organization and the specific reasons behind the cost-cutting but most experts agree that unless layoffs are part of a well-planned strategy the move could cause as many problems as it was intended to cure. See acast.com/privacy for privacy and opt-out information.