If I Have to Lay People off to Save Money, How do I Choose Which Ones to Let go When None are Problem Performers?
In truth, termination for cost-cutting reasons should have nothing to do with job performance, although many managers use it as an excuse to rid themselves of poor performers—particularly when they haven’t the level of documentation to terminate the worker due to sub-par performance.
If you must let people go, and you have no other alternative, then pay attention to the personal facts and figures of those you choose to keep. Ideally, the makeup of your department after the fact should be similar to that before the fact in terms of race, age, gender, and ethnicity. If this isn’t the case, then you may be liable for a discrimination charge. If your cuts might look discriminatory to a jury, make other cuts instead.
For instance, cutting some of the highest-paid staff members may save you more money than downsizing your younger, newer employees but it could result in an age discrimination charge if those you cut are all 40 years old or more. Projections suggest we can see a major increase in these, given the number of boomers. If you use education as a factor, downsizing those with fewer college degrees may leave your department disproportionately low in minorities. Downsizing that is too heavily weighted in women, likewise, may look suspicious to a jury.