Layoffs, Coping, and Commitment: Impact of Layoffs on Employees and Strategies Used in Coping with Layoffs

Abstract

Layoffs continue to plague organizations around the world especially as organizations attempt to optimize labor costs and other expenses. While there have been studies to attempt to understand the impact of layoffs, there are still gaps in the literature especially as we look at layoffs in the 21st century. This research examined i) the impact of layoffs on individuals’ psychological and physical well-being, ii) the impact of layoffs on the employees affective commitment, iii) coping strategies used by employees, and iv) job search strategies people are using to find new jobs. While, downsizing is a relatively common change management strategy that has been adopted for more than two decades, the prime impetus of most downsizing efforts is the desire for an immediate reduction of costs and simply survival.We found that individuals will experience significant more health problems after being laid off from their jobs. Individuals who have been unemployed for longer periods will have lower affective commitment to their former employers. We also found that maintaining more control-oriented coping strategies will be more progressive in their job searches and more able to cope with layoffs and that coping strategies are positively related to reemployment. In addition, individuals who are receiving unemployment insurance and other benefits, financial hardships exist resulting in significant challenges and life style changes and coping strategies are positively related to financial resources available to an individual.