Explain the situation when a company can use lay-off strategy.

Each company has a different approach to layoffs, often due to different tolerance levels for letting people go. Some companies seem to lay off easily, whenever they've had unusually poor quarterly profits for one or two quarters—or perhaps after a disastrous quarter, like several companies did as a result of the terrorist attacks. Other organizations, those espousing a belief that people are their most important asset, try to ride out several poor quarters without laying off any employee./ Companies that consider layoffs are usually trying to cut costs in order to dig the company out of a hole or make it more profitable. But keep in mind that layoffs can be costly in other ways.

For example, the company may have to pay severance packages, remaining workers' productivity and morale may decline, and the company might even be faced with a lawsuit, depending on how the layoff is conducted.