Axe Can Be a Double-Edged Sword

November 20, 2001( - Executives at companies that are currently wielding the job-cutting axe fear that their key employees, concerned about layoffs, will search for pastures greener, a new survey finds.

The survey by InsightExpress, an online market research firm, found that 59% of respondents at companies that have recently trimmed payrolls are worried that layoffs will encourage remaining employees to look for new jobs.

In addition, 62% of company executives who have reduced staff fear that reductions would decrease customer loyalty and encourage business customers to seek other suppliers.

Of the companies who have reduced staff in the past 6 months,

  • some 46% have reduced staff in operations,
  • almost 40% have reduced staff in administration, and
  • a little under 30% have reduced staff in customer service

Other areas of staff reduction include:

  • accounting and finance, where staff has been reduced at 22% of the companies,
  • sales, where jobs have been cut at 20% of the sample,
  • human resources positions, at 19%,
  • marketing, at 17%
  • engineering, at 16%
  • product development at 17%
  • technology/IT at 13%, and
  • other positions at 14% of companies

In response to these staff reductions, 42% of all companies indicated they plan to reallocate company resources, including human capital, asking employees to

  • be more efficient,
  • contribute more, and
  • work longer hours

The survey comprised the responses of executives from 500 between October 19 and 24, 2001.