How to Manage Layoffs as a Business Owner

With the holiday season coming to an end, many businesses are recovering from celebrations. However, some businesses go through a period of layoffs during—or following—the holiday season, which can create a negative experience for employees. Learn more about the impact of layoffs, as well as some potential alternatives, below. 

How Layoffs Impact a Business

Layoffs typically occur when a business no longer has enough work to support the number of employees on the payroll—including if the business is closing, experiencing a significant decline in workload, or if the employee’s current position is being eliminated. Employees who have been laid off may be eligible for unemployment benefits in the state of Texas. 

Laying off non-essential employees can help businesses reduce operating costs, especially in the slow season. However, excessive layoffs can have a significant impact, including: 

  • Risk of potential lawsuits
  • Loss of skilled talent
  • Low employee morale
  • Increased employee turnover
  • Sense of distrust
  • Increased workload
  • Loss of productivity

Although layoffs are a common solution to decreased workload, they are not the only option. Business owners have many methods of employee leave to choose from. 

Alternative Methods to Layoffs


During a furlough, employees are placed on mandatory, unpaid leave for a set period of time. Furloughs are often thought of as a positive alternative to layoffs—the employee is able to maintain their healthcare benefits while on leave, and their position within the company is secure. Some businesses choose to implement regular furloughs during scheduled downtime, such as over the Christmas holiday season. 

Unpaid Time Off

Many employees appreciate additional vacation time when their kids are home from school and the parents may have to stay home. Unpaid time off allows your business to reduce costs without eliminating positions. This not only helps maintain employee morale, but it also reduces the need to recruit, hire, and train new employees to fill empty positions once the workload picks back up. 

Hire Temporary or Contractual Employees

Many businesses experience seasonal increases or decreases in their workload. By hiring temporary or contractual employees, business owners can lessen the negative impacts of layoffs while still adjusting their staffing levels as needed. Consider rehiring former or retired employees who are already familiar with your business practices to reduce training time. 

At Hoover Slovacek, LLP, we strive to provide businesses in Austin and Houston with the legal support and knowledge they need to be successful. If you have questions or concerns about employment law, our team is here to help. Visit our website or contact us for more information. 


this is page.php