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Layoffs do not only affect the individual employees; they can have ripple effects within the company as well. Decreased morale can plague teams left behind, especially if layoffs are not performance-based and leave employees grappling with their feelings of insecurity. Surviving employees often face increased workloads and pressure to perform, which can lead to a toxic work environment.
From a recruitment perspective, companies that have undergone significant layoffs may struggle to attract top talent. Potential candidates may hesitate to engage with employers that have a history of instability, which can lead to a challenging hiring landscape for the organization.