DISCUSSION: LAYOFF OR WAGE CUT?
Author Note
Discussion: Layoff or Wage Cut?
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DISCUSSION: LAYOFF OR WAGE CUT? 2
Discussion: Layoff or Wage Cut?
As stated in 1 Timothy 5:18: “The labourer is worthy of his reward” (King James Bible,
1769/2017). In line with this verse, I would choose to lay off some workers without changing
wages of the surviving employees. The surviving employees deserve their wages for the work
they perform.
When faced with two difficult options, the option negatively affecting the least amount of
people is the preference. This does not mean that the surviving employees will be unaffected by
the layoffs. In fact, although the surviving employees will be unaffected financially, there will
likely be negative fallout to them as a result. If the organization allows the layoffs to create
doubt, employees “may react with organizational cynicism, defined as a state of general
disillusionment towards their organization” (Sguera et al., 2022, p. 91). With a major
organizational change like layoffs, employee cynicism of those remaining will increase the
likelihood that surviving employees leave the organization (Sguera et al., 2022). However, the
effect on the surviving employees can be effectively mitigated through proper and open
communication. In other words, it is paramount that the organization effectively communicate
and provide information about the layoffs “to avoid the emergence of organizational cynicism
among their employees” (Sguera et al., 2022, p. 90). By mitigating the negative consequences
through effective communication, the layoffs will be a more effective option.
Layoffs are also preferred because employees consider wage cuts “highly unfair” (Dietz
& Kleinlogel, 2014, p. 461). That sentiment will be compounded because with wage cuts, the
affected employees remain employed with the organization. This will most likely add to the
negatives beyond the cynicism described above. Beyond the financial losses to the affected
employees, research has shown that with wage cuts, the affected employees are more likely to
DISCUSSION: LAYOFF OR WAGE CUT? 3
steal from the organization (Dietz & Kleinlogel, 2014). This negative, by itself, should dissuade
an organization from choosing to cut wages over layoffs.
DISCUSSION: LAYOFF OR WAGE CUT? 4
References
Dietz, J., & Kleinlogel, E. P. (2014). Wage cuts and managers’ empathy: How a positive emotion
can contribute to positive organizational ethics in difficult times. Journal of Business
Ethics, 119(4), 461-472. https://www.jstor.org/stable/pdf/42921307.pdf?refreqid =excelsior
%3A2033b4140479a7e34b525c38b6f1734e&ab_segments=&origin=&initiator=&acceptT
C=1
King James Bible (1769/2017). Cambridge University Press. (Original work published 1769).
Sguera, F., Patient, D., Diehl, M. R., & Bobocel, R. (2022). Thank you for the bad news:
Reducing cynicism in highly identified employees during adverse organizational change.
Journal of Occupational and Organizational Psychology, 95 (1), 90-130.
https://bpspsychub.onlinelibrary.wiley.com/doi/epdf/10.1111/joop.12369
