Why Companies Fire People To Save Money

There are a lot of companies that will choose to fire employees instead of laying them off. Let’s walk through the instances when this happens so you can better prepare yourself.

Placing The Blame On You

Lots of companies right now are deciding to make significant cuts. They aren’t making their numbers. They’re not feeling financially secure. Whatever the reason may be, the biggest expense is people, so the fastest way to save money is to cut staff.

Now, most companies will be transparent about this and admit that it’s a layoff. They didn’t perform well. They need to make changes. They’re laying you off through no fault of your own. It stinks, but nobody’s blaming you. However, there are companies out there that will say that it’s a firing instead.

When companies fire employees instead of laying them off, they’re saying it’s not their fault. It’s not their fault you’re suddenly underperforming and, therefore, they’re going to fire you. How ironic is it that you were getting great performance reviews, everything was going fine, and then all of a sudden you’re having a performance issue?

What normally happens is the company has figured out that they can get somebody to do your job for a lot cheaper. There are a whole bunch of people in the job market who will do your job at a lower pay. But if the company lays you off in order to save money, there are laws around discrimination that you could cite and then file a charge of discrimination against them.

Some companies want to avoid any risk of this, so instead they suddenly decide you’re not performing and they document that and gather the paperwork to be able to prove that you’re not performing (you’re the problem) so they can fire you. This is how they avoid lawsuits. And when they fire you, they can replace you and hire somebody for less money.

You can never take your eye off the ball as long as you are working. If you’re making a wage that you want to keep making, you need to watch your market conditions because if you’re not growing, you’re dying in your career.

Way too many people get into kind of an autopilot situation where they’re not really growing and evolving with the market. And it’s not just about amassing more skills. It’s about strategically understanding the direction your career needs to go in so you stay relevant and in demand. You can have all the skills and experience in the world, but if you don’t know how to package that up and market it correctly to employers, you’re not going to differentiate yourself in the market and stay competitive.

Please be on the lookout for this situation in your career. The moment your company realizes they can have someone do your job for less money, you’re going to become a performance issue. It’s easier to fire you than it is to lay you off. Remember that, and make sure you know your unique value add (UVA).

Good luck, and go get ’em!

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