Recruitment & Retention

HR 101: Let’s discuss modern-day mass layoffs

It wasn’t until the 1980s that mass layoffs as we know them today started happening outside the context of a financial crisis.
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Francis Scialabba

less than 3 min read

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Welcome to HR 101. Class is now in session. Today’s discussion is all about the modern-ish history of mass layoffs in the US.

The history. Mass layoffs are those that affect at least 33% of total active workforce at a single company site and are not the result of a worksite closure, according to the Department of Labor.

Mass layoffs, outside the context of an economic downturn, were rare, with less than 5% of US employers announcing layoffs in 1979, according to Bloomberg. In the 1980s, though, they became a more common strategy.

General Electric Chairman Jack Welch became known as a proponent of laying off employees “as a sign of corporate competitiveness,” according to Quartz, and between 1980 and 1985, he was responsible for eliminating one in four jobs across GE, earning him the nickname “Neutron Jack.”

Other corporate executives followed suit, including Robert Allen, the CEO of AT&T, who famously laid off thousands of employees in 1996 when the company announced it would split into three business units. He then received a $6.7 million raise that he said he felt “no pain” accepting, the LA Times reported that same year.

Then there was “Chainsaw” Al Dunlap, who was known for helping businesses turnaround by cutting staff and closing factories. When he ran Scott Paper in the 1990s, he laid off 11,200 workers, part of what earned him $100 million in “salary, stock profits, and other compensation,” according to his obituary in the New York Times.

Fast-forward. Layoffs have been making headlines this year, with tech and retail giants slashing their workforces. Snap, Amazon, and Google-parent Alphabet have all announced layoffs in the name of cutting costs, as have Walmart, Macy’s, and Wayfair.

Torani, a flavored-syrup company, on the other hand, hasn’t had a single mass layoff in its nearly 100-year history. Part of its business strategy is to ensure that no matter how hard things get, employees are never left out in the cold.

“Certain industries hire as many people as they can, and if they don’t need those people, will lay them off,” Torani CEO Melanie Dulbecco, previously told HR Brew. “Everyone says [they can’t exist without layoffs], but if you stop and think about the underlying reasons we make these choices, then there are ways to avoid that.”

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.