proactive measures to control their costs, which downsizing represents, can receive a "bounce" in their stock price immediately after announcing a layoff. This factor can influence the decision to lay off employees if management wants the market to perceive that it is aggressively meeting its corporate obligations (Stovall, 1996, p. 34).
There are alternatives to layoffs which can result in effective cost cutting without providing the company with the severe effects that layoffs bring. Some companies, for example, have enacted across the board pay cuts until the company has sufficiently regained its profitability. Other companies have put workers on flex-time or reduced schedules so that they keep their jobs, but the company is not responsible for benefits or other costs. The result here is that the workers are available when the company returns to greater profitability. These solutions work best in privately held companies which are not subject to the scrutiny of the stock market. Still other companies retrain employees for other jobs which eliminate the need for layoffs. In addition, union rules may also dictate the exact steps that a company can take when faced with reducing its labor force, and those steps may preclude intermediate steps short
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