How Big Company Layoffs Can Affect Small Communities

There are countless American communities that rely heavily on a major employer for the majority of the area’s jobs. While this can be a great asset to the local economy, it can also be a big risk to put many of the town’s eggs in just one basket, so to speak. What happens when this company experiences hardship? What if it ends up laying off some (or all) of its workforce? How does something like this affect the community as a whole?

No industry is immune to financial downturns. Whether it is manufacturing, retail or corporate positions on the line, it can be nerve-racking when employees get wind of possible downsizing. Even worse is how this last-ditch effort to save a business can kill a community. Let’s look at three possible side effects that come from large company layoffs and things businesses can do to alleviate or diminish repercussions.


The first and most logical outcome when someone is laid off is financial stress. Job loss means income comes to a screeching halt, and when the lay off is unexpected, this can be extremely detrimental. This problem only magnifies when multiple people in a community are let go. When numerous families in a community are struggling to maintain a quality of life, they will naturally decrease spending. On a large scale in a small community, this can take a serious toll. People stop shopping and stores and restaurants feel the pinch. Before you know it, the snowball has begun to roll and the community is going to take a financial hit by seeing lower spending, lower tax revenues and lower growth.


When mass layoffs hit a community hard there is a natural emotional reaction that is felt throughout the area. Laid-off workers are left feeling confused, angry, fearful and helpless. They can feel resentment toward their superiors and co-workers who dodged the bullet and these people are likely their neighbors. Tensions can rise and emotions can be raw. This can send an emotionally charged undercurrent throughout the community. Tension can be felt in neighborhoods, schools, churches and any other place where the community gathers. Prolonged periods of joblessness can turn into depression and other mental health crises. This leads us to our next side effect.


There are physical consequences when people lose their job. Hand in hand with the emotional stress mentioned above, physical ailments can come as a direct result of job loss. When a family’s breadwinner finds him or herself without a way to provide, it can result in extreme stress and anxiety. This often results in weight loss (or gain), sleep loss, headaches and more. When a body experiences long bouts of sleep deprivation coupled with increased stress the immune system is compromised and it is difficult to stay healthy. Additionally, most laid-off employees will be without the health benefits they once had which makes getting adequate health care a real challenge. When a community has a large population of people suffering from job loss it can turn into a real health issue.

What Companies Can Do To Help

When issues arise (because they always do) one of the biggest things a business can do is to tell locals what your business is doing. Communication is key to any kind of conflict management and when a company speaks up and shares the truth, a great deal of good can come from that. Not only do employees and community members feel valued, but the company also gains respect for being forthcoming. The Wall Street Journal lists some potential alternatives to layoffs that include things like a shorter workweek, unpaid leave or offering contract positions or part-time opportunities. A business should explore all its options before it chooses layoffs. Layoffs can have drastic, negative effects on the community as well as the organization.

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