Is a 10% Reduction in Staff a Layoff?


Should a 10% reduction in staff be considered a layoff? In one sense, yes, because on a particular day, a collection of employees no longer work at a startup. But a 10% layoff shouldn’t confer messages of a financially strapped business.
Consider the average annual employee attrition in a startup ranges between 13% and 25%. A 10% reduction-in-force (RIF) is less than the quantum of employees the business would have expected to lose throughout the year.
Many established businesses force rank staff, a human resources discipline which recommends an annual 10% reduction in their staff as a matter of course.
Jack Welch, former CEO at GE, dubbed it the Vitality System or Vitality Curve. He hypothesized 20% of the employees were the most productive, 70% formed the base, and 10% weren’t accretive to the business and should be released. There are clear costs to the Vitality System, but I won’t debate them here.
When I read about a 10% reduction in staff in the press, I don’t consider it an indicator of a startup’s health. Instead, it’s an acceleration of an end-of-the-year human resources practice to maximize cash. Layoffs that are materially larger than average attrition benchmarks are a different matter.
Boost Internet Speed
Free Business Hosting
Free Email Account
Free Secure Email
Secure Email
Cheap VOIP Calls
Free Hosting
Boost Inflight Wifi
Premium Domains
Free Domains

Related Posts

Boost Inflight Internet- Business Hosting- Secure Email Account- Dropcatch Domain Names- Antisnoop Email- Free Secure Email- Cheap VOIP Calls- Free Hosting and Email- Aero Connectivity- Premium Domains for Sale- Transcom Telecom- Satphone Airtime- Mobile Plans- Free Domain Names- Organic Products- Double Check- Aviation News
Transcom ISP - Transcom VOIP - Free Secure Email - Dropcatch Software - FastApn Inflight - Aero Connect - Premium Domains