Once profit has reduced it's only right to cut cost. One of the ways is reducing employees. Why keep them when you can't pay, it's bad for business
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If this is done just to reduce costs, it is very wrong.Business at times deploy some dirty strategies to reduce the cost of production and operations. Decreasing the total amount of on payroll expense can increase the money available to invest in other areas of the business. Most business owner lower their payroll expense which affect the quality of their product and/or service. Decreasing payroll expenses can place extra burden on your remaining employees and cause quality to suffer.
.......what are your views?
Your analysis is very good. The expenses must not be more than the profits one of the expenses is employee salaries. It's only wise to cut some offYes it is a must to reduce the number of staff on payroll to reduce cost, imagine the average scalar is 50,000 but you have 10 workers and you are paying them 30,000, normally if you know you can do with just 6workers and the 50,000 salary will be constant, it is advisable to just reduce the workers and increase the salaries of the remaining ones to make them happy.
If you notice that you are not making enough money to cater for all the employees in your company, the I think you should consider laying some of them off and managing the number you can afford to manage.Business at times deploy some dirty strategies to reduce the cost of production and operations. Decreasing the total amount of on payroll expense can increase the money available to invest in other areas of the business. Most business owner lower their payroll expense which affect the quality of their product and/or service. Decreasing payroll expenses can place extra burden on your remaining employees and cause quality to suffer.
.......what are your views?