Wall Street Times

Layoffs and how it affects work output

In the last year, there have been layoffs all over the world, especially in the last four months. People who thought they would always have the same job have lost them. For example, layoffs say that more than 150,000 people will lose their jobs at tech companies in 2022. This year, nearly 76,000 more jobs have been lost. Goldman Sachs, Morgan Stanley, and Citigroup have all laid off tens of thousands of people in the finance industry. There have also been layoffs in many other areas, like the consumer retail, media, healthcare, and pharmaceutical industries.

In the past, layoffs were common because the economy was always going up and down. But experts say that this wave is different in a few ways.

The first is how big and wide they are, which is important because the economy is getting better at its core. During the Great Recession, however, a huge drop in the value of assets around the world directly caused the loss of hundreds of thousands of jobs. People died because of this for a long time, and the value of international stock markets dropped by trillions of dollars. But that’s not the case now, even though there are a lot of layoffs and jobs that need to be safer.

In the US, for example, the financial crisis of 2008 and the recession caused the unemployment rate to hit a high of 10%, with about 15 million people on the unemployment rolls. This happened because the whole economy slowed down for a long time. Because of this, about 3.5% of people currently need jobs. During the eurozone crisis in 2011, the unemployment rate in the European Union went up to over 11.5%, but it is now less than 6.5%.

How the workplace feels right now is another reason why layoffs are necessary. Anna Tavis, a professor at New York University, says that managers pushed for a leadership style that put employees’ physical and mental health first during the pandemic. “We were told to bring ourselves to work,” she says.

Because of this, many workers, both those laid off and others like Kara, who fear they will be next, feel cognitive dissonance. Tavis says they were told one thing during Covid-19, but now they know that story isn’t true. Moreover, she says, “It makes leadership look fake, which is bad because it hurts employees’ trust in leadership.”

Some experts say that organizational cultures could also get worse if waves of layoffs like the ones we’ve seen recently keep happening, or even if they’re just a possibility. This could not be good for everyone’s health, including their physical and mental health. Even worse, these problems may affect people who will live in the future.

Layoffs takes a toll

Especially importantly, losing a job can have a direct effect on health. But a lot of research also shows that losing a job makes you more likely to have several health problems.

One of the most thorough summaries of more than 300 studies shows that unemployed people are more stressed, less happy with their lives, marriages, and families, and more likely to have mental health problems than those working. Also, after a few decades, being laid off has been linked to a much higher risk of suicide and a higher death rate.

Research from 2009 shows that employees who didn’t have any health problems before being laid off are 83% more likely to get sick in the first 15 to 18 months after being laid off. Stress is the main cause of diseases like high blood pressure, heart disease, and arthritis.

But in an economy with many layoffs, not just the people who lost their jobs will suffer. Kara and other workers know that even before layoffs are announced, the possibility and fear of losing a job can affect mental health and productivity. For instance, executive coach and author melody Wilding wrote in Harvard Business Review that job insecurity could make people less motivated and lead to anxiety and depression.

Mixed messages about worker health’s importance have also confused and hurt workers.

Employees showed that their priorities and professional goals had changed during the pandemic. Most importantly, they started to care more about their mental health. Employers often heard these calls for more help, and many leaders started talking about making policies, programs, and tools to help employees who were having trouble.

Companies also started talking about how to make sure that words like “burnout,” “stress,” and “depression” aren’t seen as signs of weakness or shame in the workplace. For younger people who just got their first job in the past few years, the employee-centered company that says it cares about mental health and well-being may be their only impression of the working world.

The problem, though, is that this focus on personal health differs greatly from what many workers are going through right now. For example, a recent global survey of 35,000 workers showed that 52% are worried about how economic uncertainty will affect their job security and that more than a third are worried about losing their job.

Research by Maureen Dollard, a professor of work and organizational psychology at the University of South Australia, shows that employees in less psychologically healthy environments—places where emotional well-being is not ignored—took 43% more sick days per month. Her research has also shown that stress makes you more likely to get hurt at work.

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Other experts, like Bentley University professor of management and psychology Aaron Nurick, say that people who don’t lose their jobs can still be affected by layoffs through what he calls “survivor’s guilt,” or the feeling that “I could be next.”