Layoffs, Redundancies, Retrenchment

•    Layoffs: - refers to the release of a qualified personnel no longer needed by the organisation. Layoff may be temporary or permanent

•    Redundancy: - occurs when workers no longer needed by the organisation are laid off. Redundancy may also occur when the employer has ceased or intends to cease carrying out the business. Under redundancy employees are paid terminal dues in accordance with the statutory requirements individuals may be declared redundant when his position is no longer needed by the organisation as a result of major restructuring

•    Retrenchment: - this is the humanly way of carrying out redundancy. It does not always result after ceasing business but it can result out of the need to improve business. Under retrenchment programme employees are paid enhanced retirement packages and pension/provident fund provided they have the minimum years of qualifying service.

Factors leading to Retrenchment

•    Poor business performance owing to decline in market share. This may be due to competitive pressure from competitors among other reasons.
•    Poor management and inadequate planning
•    Business mergers, takeovers and divestments.
•    Introduction of high performance work systems which may entail:-
•    Employment of multi skilled personnel capable of increasing productivity and responding to change.
•    Introduction of new method of production
•    Introduction of organisation structures designed to enable quick decisions fast responses and empowered employees.