50 Alternatives to Layoffs

LJC Press
8 min readJun 30, 2017

How to Keep the Business Afloat Without Sacrificing Employees

Instead of relying on layoffs to keep businesses afloat, why aren’t we trying to find creative alternatives to layoffs instead? Your staff — from the C-suite on down — has committed time and energy to your business’s survival, and layoffs seem like the ultimate slap in the face.

Many of my family, friends, and colleagues have suffered layoffs over the last few years. I don’t think I have to tell you that the results can be devastating.

Maybe there are better ways…50, in fact. Let’s take a look at them:

  1. Hiring Freeze: Many of the companies that deploy mass lay-offs are still placing job postings at the same time. In other words, they’re getting rid of valuable human capital to save money while bringing in fresh blood at lower salaries. It costs less to retain employees than to replace them, so consider a hiring freeze as an alternative to layoffs.
  2. Involuntary Furloughs Across the Board: You can also avoid layoffs by requiring employees to take furloughs, such as two weeks or one month per year. These unpaid vacations give your payroll costs a break while allowing your staff to keep their jobs.
  3. Shorter Work Weeks: Shortening the work week by just one day can cut costs by a significant margin.
  4. Work-From-Home Programs: Keeping employees in the workplace costs money. People consume electricity, water, and other utilities, as well as office supplies. Sending your workers home can cut costs without dumping valued people onto the street.
  5. Slight Salary Cuts: Explain that you need to give everyone a salary cut across the board. Make it a flat number, such as 5 percent, that won’t completely shatter your employees’ personal finances, but will give your business a bit of a financial break.
  6. Benefit Cuts: Try reducing the benefits you offer as long as you remain within your legal rights. Cut employee perks that drain necessary funds from the company coffers.
  7. Drop Contractors: Here’s a wild suggestion: Instead of laying off employees, bring all the work in-house. You’ll save money by not paying contractors outlandish fees, and you’ll get more control over the work.
  8. Stop Outsourcing: In that same vein, nix the outsourcing. Keep all the work under one roof so you can control costs more appropriately.
  9. Cut Production: Instead of cutting employees, cut product or process production. If you’re experiencing a drop in demand, you don’t need excess inventory to weigh you down.
  10. Downsize Your Workspace: Consider looking for a less expensive place from which to work.
  11. Sell Assets: We all know the tongue-in-cheek comments about corporate jets and yachts, but here’s the honest truth: Your company doesn’t need fancy gadgets and outdated machinery that just collects dust in some garage. Start selling off assets to reduce storage costs, bring in some cash flow, and protect your work force.
  12. Start a Worker Exchange Program: Yes, this is a real thing. It’s kind of like a foreign exchange program, except that instead of bringing someone from another country into your home, you’re sending one of your employees to another company for work.
  13. Get the Team Involved: Now’s the time to start asking questions. It’s also the time for transparency in leadership. Let your team know about your company’s struggles, then ask for their feedback. How would they prefer you to handle the situation? Do they have any suggestions?
  14. Attrition: Sometimes, natural attrition serves as a valuable alternative to layoffs. Customer attrition is a bad thing right now, but employees who retire, move on, or otherwise part ways with your company of their own volition can help ease your financial woes. It’s an excellent long-term option if you don’t want to start layoffs.
  15. Cross-Training: As mentioned above, a hiring freeze is preferable to letting employees go. However, you might still need to cover certain tasks, and cross-training your existing employees might help.
  16. Eliminate Overtime: Sure, your employees might miss the extra money on their paychecks, but no overtime is better than no job. Every time.
  17. Offer Early Retirement: This goes hand-in-hand with the attrition angle, but gives your employees a boost. Offer an early retirement package to employees who might want to step off the corporate ladder.
  18. Re-negotiate: Don’t miss the opportunity to cut costs by re-negotiating your contracts with vendors, suppliers, contractors, and other associates.
  19. Ask for Volunteers: Some of your employees might want to jump ship, but they’re waiting for a sign. Let your staff know that you’re experiencing cash-flow issues, so you’re willing to accept volunteers who are willing to exit the company amicably.
  20. Adopt Virtual Offices: Virtual offices can be just as efficient as regular offices, but you’ll spend less money.
  21. Cut Wages From the Top Down: Here’s where I’ll probably lose a few C-level executives who like their nice houses and fancy cars, but listen up. True leaders take sacrifices before they impose sacrifices on others. Terrible leaders just sacrifice other people.
  22. Freeze Bonuses: In addition to cutting wages of the highest-earning employees, freeze bonuses as an alternative to layoffs.
  23. Cut Unnecessary Expenses: Still trimming down here. Cut expenses that aren’t essential to daily operations so you don’t feel stuck on the hamster wheel of profit-and-loss statements.
  24. Sabbaticals: Some employees might welcome a sabbatical, which is longer than a furlough, but still guarantees that the person can have his or her job back afterward.
  25. Shift Full-Timers to Part-Timers: Instead of cutting wages, you can also cut hours so deeply that full-timers become part-timers. It’s better to have half a job than no job at all, and your staffers can look for other part-time work to fill in the gaps on their paychecks.
  26. Reduce Sick Pay: It’s nice to pay employees while they’re sick in bed with the flu, but sometimes it’s not possible.
  27. Reduce Retirement and Health Care Contributions: This is another controversial move, and one that requires caution because of state and federal labor laws. However, if you can temporarily reduce these costs, your company can get back on its financial feet.
  28. Explore Mergers and Acquisitions: Some people view M&As as some sort of corporate toxin, but there are business owners who build mergers or acquisitions into their exit strategies. The chance to hand over the reins and to watch their empires grow into bigger things is the best kind of success.
  29. Facility Shut-Downs: Whether you work in an office, a manufacturing plant, a retail outlet, or some other facility, shutting down the operation for short periods of time can help rescue wayward cash flow. If you shorten your work week, as advised above, shut down the facility, too, to stop the fiscal hemorrhaging.
  30. Focus on Efficiency: How can you do things faster, less expensively, and more productively? Where can you save cash? How can you encourage your staff to become more efficient in their jobs?
  31. Job Search Assistance: If you have to let some of your workforce go, consider offering job-search assistance as part of the severance package. It won’t cure the problem, but it can help your most valuable assets further their careers.
  32. Selective Termination: Sometimes you have to let employees go. It’s not because you’re downsizing, but because those employees don’t add value to your company. If you have truly toxic staff members, start trimming your staff that way.
  33. Reassignments: Maybe you can restructure your business to make better use of your human capital. Moving employees to different departments and assigning them new responsibilities might reveal new ways to stimulate cash flow.
  34. Pay Cut With Stock Options: If you need to give your employees drastic pay cuts, consider lessening the blow by offering stock options.
  35. Short-Term Compensation: The rules vary by state, but short-term compensation plans can help save jobs while still cutting payroll costs. Employees can often collect unemployment during this period, which helps them continue to pay their bills while you get your company back on its feet.
  36. Remove Incentives: I love incentives. They’re a great way to encourage productivity and efficiency in the workplace. However, when you’re hemorrhaging money, you have to cut back somewhere. Instead of cutting jobs, cut incentives.
  37. Cut Unnecessary Subscriptions and Tools: These days, businesses use lots of subscription plans and licenses in their daily operations. While they’re nice to have, and can help with everything from online advertising to CRM, they’re also luxuries. Get rid of them instead of your people.
  38. Reduce Marketing and Advertising: On that same note, it’s time to cut the marketing and advertising budget.
  39. Call a Financial Advisor: An expert in business finance can help you look at your P&L statements from a fresh perspective. He or she might even offer a solution that provides an alternative to layoffs.
  40. Cancel Vendor Contracts: Don’t burn any bridges, but meet with vendors to explain your situation and let them know that you need to take a sabbatical from their services.
  41. Go Green: Turn your workplace into a green machine. Go paperless, use sunlight instead of lightbulbs to illuminate workspaces, sell off printers and copiers. Now’s the time to strip down (and maybe save the environment at the same time).
  42. Slim Down the Operating Margin: Instead of getting rid of half your workforce, allow yourself to narrow your operating margin. It’s just like budgeting for a family; reduce expenses, restructure your business, do whatever’s necessary to keep your people.
  43. Pursue Outside Funding: This isn’t always possible, especially for a business with credit-related red flags. However, an injection of cash can sometimes help a business avoid layoffs and recover from a setback.
  44. Remove Discretionary Spending: Institute a policy that requires upper management to approve any spending. Create rigid guidelines around corporate spend so you can control your costs more thoroughly.
  45. Nix the Expense Account: Take away those corporate credit cards and let your sales force know that you’re not approving afternoons on the links or business lunches at the local steakhouse.
  46. Sublet Excess Space: If you follow a few of the other tips on this list, you’ve probably cleared some space in your facility. Consider subletting it to another business to bring in some cash flow.
  47. Focus on Organic Marketing: When you cut back on advertising, that doesn’t mean you can afford to stop wooing customers. Focus instead on organic marketing: SEO, social media, and the like.
  48. Negotiate With Creditors: Piles of debt can make any business owner nervous. As an alternative to layoffs, try negotiating with your creditors to bring your monthly obligations down a touch.
  49. Examine Your Insurance Packages: Many businesses carry too much insurance. Normally, I would suggest that an overinsured company is smarter than an underinsured one, but sometimes you have to take a gamble for your people.
  50. Engage in Barter: Instead of acquiring inventory, merchandise, and other assets on credit, investigate barter agreements. They’re healthy for both businesses and they free up cash flow.

Are layoffs sometimes necessary? Yes, I’m forced to reluctantly conclude. However, I hope that, for most businesses, they’re a last resort instead of a front-line option.

It’s better to lay off some of your employees than to lose your business. I get that. Just don’t make it your go-to solution when your business starts to slip into the red.



LJC Press

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