Aspects of Layoff of Wage Cut

Subject: Employee Management
Pages: 2
Words: 381
Reading time:
3 min

A period of economic recession can be a difficult time for all members of the economy, both workers and their employers. As money is functionally necessary for human society, one must always take into consideration the potential profits and losses, as well as think about the possible decisions to maximize the former and minimize the latter. From this point of view, companies and leaders should always prioritize making as much money as is currently possible, but that cannot be said to be morally or socially right to do. Businesses operate relying on their employees, they take the fruits of other people’s labor and compensate them in exchange for further profits. The social collaborative element of the process means that a leader or a business owner has to take into account the wellness and prosperity of those under his supervision, showing both care and involvement. A leader must help their people and provide them with what can be considered fair and right treatment. The responsibilities of an employer stem from a mix of legislation, social, moral, and biblical principles.

With that being said, some case scenarios present employers with unique challenges in this regard, especially in terms of choosing to do the right thing. In a case where the optimization of production costs can be achieved through reducing spending, a leader can either cut the wages of all their employees or lay off one of them while the current wages remain. The second option would be more moral and right in the face of a difficult situation if one were to consider the implications of both actions. By reducing the wages of all employees, one has a significant impact on worker morale, their prospects, and their relationship to their job. Many organizations avoid reducing pay at all costs, and this conviction should be supported (Du Caju et al., 2015). It would be unfair to the people that work for an organization to receive less than their effort is worth, as they are all people deserving of being treated well. If a company is unable to pay a good wage to all of my employees, it might be better to lay one of them off so they can find a more suitable place of employment than making them all suffer to cut costs.


Du Caju, P., Kosma, T., Lawless, M., Messina, J., & Rõõm, T. (2015). Why firms avoid cutting wages. ILR Review, 68(4), 862–888. Web.


Seeing the perspective Mitchell holds has allowed me to revise and review my stance on the issue. While it is understandable that the question of treating one’s employees would be nuanced, it is difficult to consider all the possible standpoints while also following a biblical perspective. Mitchell argues that the process of laying off an employee during a recession has a significantly higher impact on a person’s life than mass wage cuts. While I can understand how this position is rationalized, I am unable to fully agree. I think that the consequences of layoffs are largely understated in this response, as well as their severity. First, many of the people faced with wage cuts simply leave of their own accord, unable to sustain their living with the newly reduced pay. This creates an even larger pool of unemployed people than a single layoff, hurting a wider range of individuals in the process. Additionally, there is no guarantee that the wages will return to normal, or that a company will be able to make a full recovery after the recession (Liu, 2020). The livelihood of employees will likely be permanently affected by this event. However, I should note that I have understated the effects of laying a person off, especially in times of economic turmoil. To make the right decision, it is necessary to consider each possible outcome in detail. As noted in Proverbs 4:7 “The beginning of wisdom is this: Get wisdom, and whatever you get, get insight”, meaning that a person should always strive to get a deep and thoughtful look at the circumstances before them (ESV, 2001, Proverbs 4:7). This perspective is most useful when trying to decide one’s attitude towards others, especially in matters of payment and wages.


Liu, J. (2020). 1 in 3 workers had their pay cut during the pandemic, and women’s salaries are taking longer to recover. CNBC. Web.

English Standard Version Bible. (2001). Web.