Companies that bring on new workers while laying off others increase the risk of a discrimination lawsuit. By Fay Hansen
CEO Steve Ballmer rocked the high-tech world with his January 22 e-mail to Microsoft employees announcing that the company would eliminate 5,000 jobs in the next 18 months, including 1,400 immediately.
The layoffs and other cost-saving measures will help Microsoft save $600 million in the first quarter of 2009 and $1.5 billion for the full fiscal year ending June 30.
Ballmer noted, however, that net employment would contract by only 2,000 to 3,000 jobs. He explained the company would simultaneously "open new positions to support key investment areas during this same period of time."
Microsoft’s decision to hire new employees in the middle of a mass layoff reflects a broader trend now under way. Nearly two-thirds of employers plan to lay off workers in 2009, but many will not freeze hiring, according to the latest surveys.
Instead, companies will continue to hire new employees for their still profitable units, upgrade their talent and replace higher-cost employees with lower-cost new hires. Hiring during layoffs, however, increases the likelihood of a discrimination lawsuit.
"We suggest to our clients that there is opportunity in the recession to hire talent if a company is able to do so," says Michael Rosen, partner and employment law specialist at law firm Foley Hoag in Boston. "There is some inherent risk, but it can be minimized as long as the company is sensitive to it."
Read the rest of the Workforce Management article here.
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