Clarita Cosmetics Is Confronting a Decline in Sales Due Largely

question 94

Multiple Choice

Clarita Cosmetics is confronting a decline in sales due largely to a general economic downturn. The top management team is debating whether to lay off employees. In the debate, the following statements are made. Which of the statements is FALSE?

• A) If Clarita Cosmetics lays off a large number of employees, there will be a significant loss of human capital that will cause further downturns in the firm's performance.
• B) A moderate-sized layoff at Clarita Cosmetics will probably improve firm performance.
• C) If Clarita Cosmetics restructures, it ought to increase investments in training and development.
• D) A layoff will increase the slack at Clarita Cosmetics and allow the firm to absorb the increased number of errors employees may make until they learn their new tasks.

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