Corporate Layoffs: Necessity or Bandwagon?

The sun has now set on one of the most storied American corporations. For the 15 year period from 1982 to 1997, it was THE top performer in the entire US stock market. Jim Collins immortalized the company in his 2001 bestseller Good to Great. Today, Circuit City has gone out of business and laid off 34,000 employees.

Back in October, consulting firm Watson Wyatt reported on CNN Money that a quarter of US employers expect to make layoffs over the next twelve months. That estimate may be conservative now with some analysts predicting unemployment at 10 percent or higher over this next year. Corporate layoffs have become the daily news headlines.

Circuit City's layoffs were out of necessity because the work is clearly gone. But are some corporations simply cleaning house during this economic downturn? There are altruistic executives out there, but the cold reality is that publically traded companies are accountable to shareholders. Are some companies simply reacting to market pressure to cut costs? Or is the work clearly gone and layoffs are an absolute necessity?

Do you feel the US Government's stimulus plan will create a sufficient number of new jobs in the short term?