What's behind company layoffs? From Marketplace, I'm Nancy Marshall Ginser in for David Boncaccio.

Happy 4th of July. Layoffs have been in the headlines a fair amount recently, with some companies

cutting jobs in stages. Microsoft, Amazon, and BlackRock are among the employers that have

reportedly had repeated rounds of layoffs

in recent months. Marketplace's Stephanie Hughes looks at why this happens. Managing the size of a

workforce is difficult. And Josh Berson, an industry analyst who studies human resources, says

companies don't always get it right. And we look around, we say, hey, we got too many people. How do we get all

these people? Well, I don't know. So-and-so hired a bunch of people, so-and-so-hired a bunch of people. Let's cut a bunch of headcount. So this cycle goes around and around and around. Burson says investors often pressure companies to reduce headcount as a way to cut costs. And right now, that's taking the form of expanding the use

of artificial intelligence to reduce the need for human labor. So virtually every company

is having a conversation about how do we buy more AI and implement it quickly and reduce the number

of people? It's not a good strategic move to let people go in dribs and drabs,

says Peter Capelli, a professor of management at Wharton. The reason is because it panics the

survivors. Your immediate sense is likely I could be next. So what I do is I sort of stop working

and spend my time trying to job hunt and figure out what I'm going to do if I get

hit in the next wave. Cabelli says a good alternative to rounds of layoffs is to have current

employees work less. You could go to shorter work week with shorter pay, unpaid vacations,

and employees may be surprisingly appreciated because they understand it's

an effort to prevent layoffs.

Capelli says a big advantage to the strategy is it's flexible.

When employers need people working more hours again, they don't have to go back to square

one and hire.

I'm Stephanie Hughes for Marketplace.

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