Why employment regulations sometimes have unintended effects on workers

TECH giant Yahoo announced early this month that it would be shedding 15 per cent of its workforce to cut costs. Earlier, Deutsche Bank said it would eliminate 23,000 jobs or 25 per cent of its total workforce.

With such job cuts announced almost on a weekly basis, how much do these exercises cost? How would employment protection affect the hiring, firing and relocation practices of an organisation?

Retrenchment is part of business practice in several industries, particularly for industries with uncertain demand, such as the competitive tech industry. For instance, Microsoft announced last year that it was laying off 18,000 employees, and Hewlett Packard announced it will cut 58,000 jobs.