LAYOFFS VS. UTILITARIANISM

Layoffs. We all know what they are, and we as people can pretty much agree that they suck; the affected lose their income, insurance, identity, and sense of stability. When understanding the intersection between utilitarianism and layoffs, the situation seems pretty black and white. Utilitarianism prioritizes the greatest good for the greatest number of people; thus, when people get laid off, people are harmed, hence contradicting utilitarianism. However, the situation is not so dualistic; what if layoffs—although harming a small group intensely—actually benefit a larger group modestly? Is this an acceptable utilitarianism trade-off? 

Let’s dive into one side of the argument first: layoffs ARE justified by utilitarianism. One argument that can be made is a scenario where the company’s survivability is at risk. In this scenario, if the company doesn’t cut costs, then everyone would lose their jobs; an example of this occurring in real life is the COVID mass layoffs of airline workers, which was horrible for the airline workers, but also prevented total collapse, which would harm ALL workers in the corporation. Another scenario is that remaining employees gain more benefits. When a company lets go of a certain number of workers to protect the benefits and pensions of the remaining employees, the quality of life of existing employees goes up, leading to another tradeoff. 

Now, let’s get into the argument AGAINST layoffs being utilitarian-justifiable. Many argue that the actual harm is often under-calculated. A layoff isn’t merely a person losing their job, but is also a loss of healthcare, a decline in mental health, and strain on families. While a few employees may gain a benefit or two, the people who are laid off would lose all of the benefits. Additionally, the question of who can really make the decision to lay someone off comes up. The people that are laying off the employees don’t bear any cost themselves; in fact, they often face the benefit of boosted stock price short-term, which is problematic as it can be an incentive to lay off more workers that does not even benefit another larger group of workers. 

A question comes to light: does it matter why a company lays people off (survival versus stock price) even if the utilitarian benefit comes out the same both ways? Kant sneaks its way into this ethical problem, analyzing the tension between the moral duty and intention of the actor versus the true outcome of the situation.