In conditions like what we are seeing now, the overwhelming majority of companies that lay people off simply have no other choice. When the business is in an extended operating cash crunch, expenses have to be cut, or, the business must burn through it's savings (which it may not have).
Prior to the recent trouble in the financial markets, a business facing a short term operating cash crunch typically could access a line of credit to bridge the gap until business activity improved. For most companies, that option is entirely GONE.
Therefore, we can expect more companies will be forced to act, since there is no line of credit available to provide any "elasticity" for maintaining operations.
Cash is King.
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