Silent Layoffs: The Rising Trend of Forced Resignations in Corporate India

When an employee leaves their job as a consequence of pressure from managers, supervisors, or board members, it is referred to as forced resignation. Forced resignation during layoff times is quite common, as companies often use this tactic to reduce the number of employees without having to lay them off.

It involves putting pressure on employees to resign voluntarily, usually by offering them severance packages or other incentives. This is a situation that falls somewhere between being laid off and being fired.

Forcing an employee to resign is typically done by an employer or manager who wants to avoid the hardship of terminating them and the expense of severance pay. Employees may be asked to sign a resignation letter as a condition of receiving their severance package or other benefits, even when they would prefer to stay. This can be a difficult decision for employees to make, as they may face financial hardship or struggle to find new employment in a difficult job market. Some employees may also be asked to take a demotion or a pay cut as an alternative to being laid off, which can be another form of forced resignation. In these cases, employees may feel that they have no choice but to agree to the terms offered, as they fear losing their job altogether.

Overall, forced resignation during layoffs can be a challenging and stressful experience for employees, who may feel that they are being pushed out of their jobs unfairly. It is essential for companies to handle these situations with sensitivity and respect for their employees, and to provide them with appropriate support and resources to help them transition to new employment.

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REFERENCES: Jensen M., Murphy K. 1990. Performance pay and top management incentives. Journal of Political Economy 98: 225-264. Denis DJ, Denis DK. 1995. Performance changes following top management dismissals. Journal of Finance 50: 1029-1057