CNN Article, March 14, 2005
http://money.cnn.com A report was recently released claiming that companies looking to downsize might benefit more by firing the bottom 10 percent of the workforce rather than middle or upper management.
The standard thinking behind layoffs and downsizing runs counter to this report. Most labor consultants advise companies to fire middle or upper management because wages for these employees are often inflated. Middle management also tends to get bloated as employees work up the corporate ladder. Many experts think that reducing middle or upper management can save a lot of money without setting a company back too far from an operations standpoint.
The report claimed that the "bottom up" approach to downsizing should be used sparingly. Once the supposed "deadwood" has been cleared out, the company should be able to operate more efficiently. If the company changed gears and experienced a period of growth requiring more labor, the 'bottom up" approach would probably be less effective. The relatively new hires would be less likely to be any better than the workers let go.
