The organisations are well aware of the incapability that comes with a bearish market and controlling costs and employee retention, hence they are to understand the forces acting behind such conditions. Organisations must be ensured of its own weaknesses and contain a buffer in which the employees remain safe even in times of unavoidable distress. Layoffs are hard to digest, especially when the laid off employees find it difficult to find another option in quick succession. The organisation when hires employees and promises a set of rights and entitlements to performing employees must also take the responsibility of retaining them even when it is impossible for them.
Layoffs are unavoidable but with careful attention they can be reduced to a large extent. Understanding the market system and movements is the key to identifying the subsequent progression and recession (Vasic, 2009). The organisation must identify the key issues which come with recession and financial crisis, and mould its cost structure accordingly. The cost structure, even in a bullish market, is kept under control and is made an organisational culture. There is much room for the organisation to remain cash rich in times of crisis. Unreasonable investments and absence of tough market analysis leads to cost overruns, which make treasury build-up difficult.
This forces the organisation to lay off employees during recessionary periods, which can easily be avoided if only it was filled with a substantial treasury during bull market periods. Layoffs are a major problem for organisations because it loses some enriched and talented workforce, which could escalate the organisation to new heights. The move of laying off well-performing employees is an unethical act on part of the organisation, and it resembles their greedy nature. Preserving ethics is essential for the long term sustenance of organisation and must therefore refrain from such acts.