Job Losses lead to outsourcing

Everyone is well aware of the overwhelming state of the economy right now, and in Canada jobs are being cut across the country. To give people a more basic understanding of why  large public traded companies have these large layoffs in tough economics times, I will provide the basic cycle.

1. First people stop purchasing as much as they usually do because they hear that certain companies, banks, or the market in general are not doing well. Let’s face it when people start getting laid off we all worry. We spend less because the realization of saving for tough circumstances is almost human nature.
2. The downhill spiral gets worse when public traded companies start to see large declines in sales, and must reduce costs to show revenue in the fiscal year. The reason why they do this is to get shareholders to keep their shares with the company and to stay confident in them. If the company is not profitable often people will invest elsewhere.
3. This creates massive layoffs in large organizations which simultaneously effects some smaller companies such as print shops, local convenience stores etc
4. The government usually lends or gives grants to some of the larger organizations money to help kick start the economy and you sometimes see very low interest rates on mortgages etc to get people buying again.

So now that you have the basic understanding of why people lose their jobs in an uncertain economy you may wonder what could a person do to make ends meet while they are laid off? Great question - Whatever your specialty is you can most likely outsource yourself to companies and work off of contracts for awhile. Many companies are hesitant to hire employees right now but will hire contractors for a great price. You may not be able to make the premium dollar that contractors are use to but it will put bread on the table.

Another great option is going back to school. Yes this involves spending money, but the tax benefits the Canadian government gives while you are a FULL TIME student are great. There are also many provincial programs out there to help re-coupe some of the tuition costs after you have graduated.

If you have any more ideas for potential things to do after getting laid off in this tough economic time please leave a comment and share!

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