Topic: Lay off vs Pay cut (Read 1033 times)

When a Pay-Cut occurs in any working environment, it creates a demotivating attitude for the workers. There have been many studies conducted that have shown that when this occurs a worker's performance becomes less productive.
The workers begin to slack off by showing up late for work and become less responsible once wages have been cut. On the other hand, when word gets out to the workers the company will have some layoffs to creates a atmosphere and environment of fear. This as a result makes the worker more productive.
The workers fear that they may be in the line of potentially being one who who get a lay-off This a great example that many businesses around the world were faced with only two options. Either cut-off employee salaries or lay-off employees were the decision that had to be made by a boss due to the pandemic.

Personally, I think this is a difficult decision to make, and it really depends on my current financial situation and job prospects in the current job market. If I'm able to afford a pay cut and believe that my job is secure enough to weather the current period of difficulty, then I might consider taking the pay cut.

However, if I need to maintain my current salary to cover essential expenses or if I believe that there's a high chance of being laid off anyway, then I might choose to take the layoff and look for new job opportunities.

So, it really comes down to weighing the potential benefits and risks of each option and making the best decision for my own personal circumstances.

I couldn’t afford a pay cut so assuming this was a reality for me I’d accept to be laid off. I have been at my current company for a long time so legally they would owe me a redundancy package. I’d take that & then get another job. Providing it didn’t take me forever to find a new job I’d get about £10,000 and a nice little holiday from working. I think I could find new employment so I’d take my £10,000 redundancy pay & tell my boss to stick his pay cut.

if a boss calls and gives the option to be terminated from work or paid 50% it's like we as employees have no self-esteem and I think the company doesn't need us but squeezes our energy to realize the dream of its own company.
so even though the company's situation needed me, I was given the choice of being fired or a 50% salary, I would still quit the company.
if indeed the company's situation requires our staff, the salary should be increased, not lowered to 50%. it will only waste time.
Well, even though we need money when the economic situation is difficult, for me self-esteem cannot be bought with money

for me opening my own business would be better than working in a company only required to work to fulfill the boss's dream.
by opening our own business we indirectly become the boss of our own business owner

That's also my point. Staying in the same company with a pay cut-off in some people is not an option but a force obligation due to their needs. Like you, your family needs your salary for your expenses.

You can't gamble to move away as you don't have assurance that you can easily land a job,
it's your only option to continue surviving. Maybe if the growing economy start to show good
recovery and there are many available jobs that might be the time for you to start finding and
land the suit job for you.

Given the current economic situation, I guess we won't have a choice. In case if I don't have a family, without thinking, I will choose the second option and leave the company immediately. But if you are a married person, quitting your job and waiting to be accepted into a new job is really difficult to choose and there is no guarantee that the new job will bring a higher salary. Don't forget that a bad economy means all companies are in the same predicament. I want to say that the choice is up to each person's situation, no one is the same.

The answer is quite easy.  It depends on the situation, if I am confident that I can get another job asap or there is a job waiting for me else where, I will choose lay-off.  It is better to terminate the employment contract and get the benefits while moving to another job that will pay me in full.  But if there is no job to transfer to, then a pay-cut is the wise decision.  I will accept the payment cut while looking for a new job that will give me a better wage.


True, the decision of an employee depends on what is an available option for him.  As I stated, if there is a job waiting then pay-cut is not an option, plus lay-off means the company will pay the necessary bonuses and separation fee.  This is very good if an employee had found a new job and is already accepted in the new company.


I agree, it is the task of the CEO to ensure the stability of the company, so his job is not to maintain his employees but to maitain that the company is not at a negative.  Besides, if the company gone bankrupt because the CEO failed to implement the reducing of employee, then it is more devastating because not only a certain percentage of employee will be removed but all of them.  And the option of pay-cut won't be implemented because the company is already bankrupt and has no fund to continue its operation.

So just like a gardener weeding out "harmful grass" in order for the plant blossom, the CEO will do the same thing by laying off percentage of employees in order for the company to survive.

If you have other options then why not, but most of the time people will choose to take the otherside knowing that opportunities are not wuit that much for them.

They will accept the pay-cut off to continue leaving with food in their plates, while others will
explore and see if how they can land a new job that will suits to thier skills or some are exploring
to a new one just to fill the needs of the family.

From the company's perspective choosing paycut over laying-off will be advantageous to them if the workload is much than to be handled with lesser amount of employees.
If this is the scenario they will try their best to persuade the employee to take a pay cut.

But from the aspect of the employee, if the situation is that you either take a pay cut or you are laid off you have an option to choose lay off if there is job availability in your environment and if the skill you have is very high in demand.
A company can only threaten you with a layoff if what you do can easily be done by a random person without much training.
But if you are highly skilled and experienced no company will easily give you an option of lay off.

On a normal grounds, if I am faced with that challenge I will take a pay cut and within that period I am with the company I will be submitting my resume to other companies for a necessary exit.

I don't think that laying people off is contributing factor to being a heartless CEO. You gotta do what you need to do in order to cut losses for your company if it is needed and this is why it is not always a good mindset to be just loyal to your CEO or your boss. You could endanger your other employees just because you tried to save one employee and worse is risking your company into bankruptcy. If your boss would lay you off, s/he would at least give you a notice either a week or two before you leaving the company and that is the cue to put your job hunting into top priority.

Regardless you are still someone who can be replaced by another candidate if they found better and lesser cost. This is one of the reasons why many people are dreaming to be a business owners. Many but not all.

I'll also have no choice but to take the pay cut since I've tried to applied in so many companies but even getting an interview is hard to get. That's why right now I'm trying to learn some new skills so that myself is more marketable to these companies.

But for those people living in a country that has a lot of opportunities, choose to be laid off and find a better job. That's the most ideal thing to do if you have a choice to make.

If you are living in a country with a stable economy and finding a new job will not be too difficult, of course we will choose the second option, which is to quit. But if you're living in a country with unemployment, and companies constantly laying off employees because they're struggling in times of crisis, then I don't think we have a choice here.
You are lucky to still have a stable job with a decent income, but in many other places unemployment is increasing, it is almost impossible to find a job, most people choose to move back to their hometown because they can't find a job.

At the end the decision will depend on the economic conditions of the country, if the country in which you live has a good economy then it is likely you will prefer to be fired and just get a new job somewhere else, however if you live in a country where the economy is not as strong and it could take you months or even more than a year before you get a new job then you may decide to get the pay cut for now while looking fro a job that at least pays close enough to what you used to get.

I do not agree with that, life is already quite hard, getting a pay cut is not acceptable and even if they accept it for a short period of time, unless they were paid a whole big amount, they will try to look for other jobs that will pay as much as they used to get paid, or maybe even more.

Inflation is a big problem and while everything is going up in price due to inflation, the salary can't be going down, that just doesn't make financial sense to anyone. I say either fire me, or keep my salary the same, there is no in between for me. I am thankfully working with a good salary, and there is no cut for me and I am making a good enough income that I don't have to worry about the inflation that much.

Tough call; it made me think. If I am the heartless kind of CEO, then yes, laying people off is the solution, as it really cuts off the expenses in terms of salary, but the problem is that I am taking care of my people. My idea is to ask my employees to choose what they want; it is like a survey to know the majority's suggestions. If they want me to lay off people or just cut their salary, I am sure that employees would say cut their pay because it is challenging to have no job and also tricky to find one. I will mostly choose what the majority says since both options can benefit the company.

Wow, what a dilemma, I think this is a difficult decision and this decision that must be taken by someone. Personally, I would probably take a pay cut and stay with the company I work for. However, many people may feel differently they might take layoffs just to avoid having to make that choice in the first place.

A company's PoV would be like: It is better to try to keep operating with extreme strategies than to force spending levels to continue to tend to be stable when the company is critical which will eventually all be over. Companies go bankrupt, all employees had to quit.

Wow this is a very tough call. Ideally you should get laid off and look for another job but since everybody is losing their jobs in a such environment, a 50% pay cut don't look really bad. This is how the beginning of a recession looks like. Either with no job or a 50% paying job, people will have to spend less and less. That's what the high interest rates do to the economy and you know what? It should have happened long time ago. The FED was too late to act and even believed their own "inflation is transitory" bullshit.

Man, 50% pay cut is like doing a charity works TBH. Well, that depends on your position and salary bracket, but most people who will be chosen for this kind of situation are those at the rank and file. So, that remaining salary you'll make is not gonna be enough to sustain your family needs.
I'd rather choose to be laid off, but will humbly ask my employer to keep me for at least a month while I am working to find another employer. My nephew once faced with this kind of situation and he did what I suggested above to negotiate to his boss. Fortunately, everything works perfectly well and the transition went smoothly.

yeah I think it's pretty wise. Still choose to work even though the salary is reduced. and while working we can first look for good opportunities to replace the current job. or you can also look for a side job to supplement your income from outside. because the salary cut of course also has a big impact on our economy. because even without deductions from salary, many people often have difficulty making ends meet until the next payday. because inflation makes the price of goods rise and so does our cost of living. then getting a salary cut when inflation takes place will definitely make things more difficult. so looking for a side income might be a solution.