Editing Layoff (section)

== Effects ==
Traditionally, layoffs directly affect the employee. However, the employee terminated is not alone in this. Layoffs affect the workplace environment and the economy as well as the employee. Layoffs have a widespread effect and the three main components of layoff effects are in the workplace, to the employee, and effects to the economy.  One framework to examine the effects on the macro level is PSB, which examines the stakeholders perspective in global downsizing. This framework examines the global perspective of positive and negative stakeholders behavior during downsizing.<ref>{{cite book|last1 = Tzafrir|first1= S. S.|last2= Ben-Gal|first2= H. C.|last3 = Dolan|first3= S. L.|date =2012|chapter = Exploring the etiology of positive stakeholder behavior in global downsizing|title = Downsizing: Is less still more?|url = http://www.eng.tau.ac.il/~bengal/downsizing.pdf|publisher = Cambridge University Press|pages = 389–417|archive-date = 2021-01-27|archive-url = https://web.archive.org/web/20210127125741/http://www.eng.tau.ac.il/~bengal/downsizing.pdf|url-status = live}}</ref>

===Effects of layoffs in the workplace===
Layoffs have remained the greatest way for a company to cut costs. Although from the employer's perspective a layoff is beneficial for the [[business]], layoffs create an uncertainty in the workplace environment and lowers other employees' [[job security]] as well as creates an apprehension and fear of [[Termination of employment|termination]] for the remaining employees, and subsequently lowers overall motivation in the workplace environment. According to ''Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations,''<ref name=Noer>{{cite book |last1=Noer |first1=David M. |title=Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations |date=2009 |publisher=John Wiley & Sons |isbn=978-0-470-50015-6 }}{{pn|date=February 2025}}</ref> in the post-layoff environment, there is a need for empathy, tangibility, self-knowledge, and relentlessly seeking customers among the surviving employees. The remaining employees may have feelings of [[survivors guilt]]. In order to diminish negative effects of layoffs, Wayne Cascio suggests alternative approaches to layoff and downsizing as "Responsible restructuring" approach.<ref name="CascioResponsible">{{cite journal |last1=Cascio |first1=Wayne F. |title=Strategies for responsible restructuring |journal=Academy of Management Perspectives |date=November 2005 |volume=19 |issue=4 |pages=39–50 |doi=10.5465/AME.2005.19417906 }}</ref> Optimism is critical for rebuilding the workplace environment because employees look to their leaders for stability and predictability. No matter the position in an organization, employees will look for job security.

===Effects of layoffs to the employee===

[[Employment|Employees]] (or former employees in this case) can be affected in a couple of different ways. When an employee is laid off, his or her general trust in long-term work may decrease, reducing expectations upon rehire. After an employee withstands a layoff, the effects can trickle into future employment and attitudes. Layoffs in the workplace often leave the former employee less inclined to trust future employers which can lead to behavioral conflicts among co-workers and [[management]]. Layoffs can erode confidence, making employees feel insecure about their job performance and career prospects.<ref>{{cite journal |last1=Brockner |first1=Joel |last2=Davy |first2=Jeanette |last3=Carter |first3=Carolyn |title=Layoffs, self-esteem, and survivor guilt: Motivational, affective, and attitudinal consequences |journal=Organizational Behavior and Human Decision Processes |date=October 1985 |volume=36 |issue=2 |pages=229–244 |doi=10.1016/0749-5978(85)90014-7 }}</ref> Despite new employers not being responsible for a prior circumstances, job performance may still be affected by prior layoffs. Many companies work to make layoffs as minimally burdensome to the employee. At times employers may layoff multiple people at once to soften the impact.

* Denial stage is the first stage in the emotional reaction to change or layoffs, in which an employee denies that an organization change or layoff will occur.<ref name=Aamodt>{{cite book |last1=Aamodt |first1=Michael |title=Industrial/Organizational Psychology an applied approach |date=2014 |publisher=Cengage Learning}}</ref> 
* Anger stage is the second stage of the emotional reaction to downsizing, in which an employee becomes angry at the organization.<ref name=Aamodt/>
* Fear stage is the third emotional stage following an announcement of layoff, in which employees worry about how they will survive financially.<ref name=Aamodt/>
* Acceptance stage is the fourth and final stage of the emotional reaction to downsizing, in which employees accept that layoffs will occur and are ready to take steps to secure their future.<ref name=Aamodt/>

===Effects of layoffs in the American economy===

Layoffs create lower job security overall, and an increased competitiveness for available and opening positions. Layoffs have generally two major effects on the [[Economy of the United States|economy]] and [[stockholders]]. The way layoffs affect the economy varies from the industry that is doing the layoffs and the size of the layoff. If an industry that employs a majority of a [[region]] (freight in the northeast for example) suffers and has to lay employees off, there will be mass unemployment in an economically rich area. This can have leave [[ripple effect]]s nationwide. Unemployment is the biggest effect on the economy that can come from layoffs.