Quote:
Originally Posted by GGG
Staff layoffs don’t make sense unless you are expecting this to fundamentally change Your operation going forward. You need about a year to pay for severance and the cost of hiring and training a new person to break even on a lay-off.
So if you expect to need the people within a year you keep them on. The payback is shorter for contract staff.
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Lots of companies had/have fat to trim. Usually it farthest from the wellhead. This time around it will be everywhere but still mostly farthest from the wellhead.
Also, I think this will fundamentally change how Businesses in this sector are run that will lead to savings greater than the severance packages that are handed out.
What is going rate for severance, 3wks per yr worked? So if the average worker in a layoff has 7 years that is 21 weeks or just shy of 5 months. Add the overhead of the worker at another 50+% and after 3.5 months you are net positive in theory. Just an example obviously.
Also other savings considerations as well.