The Hidden Costs of Layoffs at Americold Realty Trust: What Employees and Retirees Need to Know

Healthcare Provider Update: Healthcare Provider for Americold Realty Trust: Americold Realty Trust does not directly list a specific healthcare provider within the available data. However, it typically offers employee health benefits through common providers affiliated with its health plans. Employees are encouraged to review their benefits package for pertinent details regarding insurance networks and available healthcare providers. Healthcare Cost Increases in 2026: As Americold Realty Trust prepares for 2026, employees should brace for significant increases in healthcare costs. Premiums on Affordable Care Act (ACA) marketplace plans are anticipated to surge, with some states projecting hikes of over 60%. The expiration of enhanced federal subsidies, coupled with rising medical costs and aggressive rate increases from major insurers, may result in employees facing out-of-pocket premiums increasing by over 75%. Understanding these changes will be vital for Americold employees to manage their financial planning effectively in the coming year. Click here to learn more

When a significant company like Americold Realty Trust faces the tough decision of layoffs, the immediate financial consequences can often be surprising. For example, when a tech giant announced cuts in November 2022 involving 11,000 employees, the separation expenses alone amounted to nearly $975 million, averaging over $88,000 per affected employee. While these costs are substantial, they were reported to be offset by reductions in current expenses such as salaries, bonuses, and other benefits.

The Real Price of Layoffs at Americold Realty Trust

Accounting for layoffs by simply calculating cost reductions and immediate savings can often overlook the deeper, more hidden costs. Research and expert analysis suggest that layoffs can disrupt productivity, morale, and overall company performance. Americold Realty Trust employees might experience fear and a decline in morale, resulting in decreased work quality and an increase in workplace accidents and product defects. Additionally, companies like Americold Realty Trust often face higher turnover rates, necessitating extra expenses to hire and train new employees. Other financial consequences include increased unemployment insurance tax rates and potential legal costs from discrimination lawsuits.

Indirect Costs and Long-term Impact for Americold Realty Trust

According to Wayne Cascio, a renowned professor at the University of Colorado-Denver Business School, companies that opt for temporary measures such as furloughs instead of direct layoffs tend to regenerate and perform better financially up to two years later. This finding could be relevant for Americold Realty Trust when considering different strategies to manage workforce reductions.

Separation Practices Across Industries and at Americold Realty Trust

The approach to separation varies significantly across industries and geographic regions, and Americold Realty Trust's practices might reflect this diversity. For instance, a quarter of U.S. companies ensure separation for all employees, while the global rate is slightly over 42%. In the healthcare sector, companies often offer more favorable terms, which can include extended medical benefits and compensation for increased leave time. As an example, Theseus Pharmaceuticals Inc. provided a severance package averaging $212,000 to each laid-off employee, one of the highest recorded by Bloomberg’s analysis. Understanding how Americold Realty Trust's approach compares can provide insights into industry best practices.

Productivity Decline Post-Layoff at Americold Realty Trust

Data from ActivTrak, which monitors employee efficiency through software, shows a tangible decrease in productivity following layoffs. For instance, among  seven companies  studied from January 2022 to April 2024, the average working time dropped by nearly an hour per day. This results in a loss of about 18 hours per month per employee, leading to significant financial losses over time. Americold Realty Trust might need to consider these productivity impacts when planning workforce reductions.

Long-term Costs of Increased Turnover at Americold Realty Trust

Implementing layoffs leads to an increase in voluntary turnover rates, which can be more costly than the layoffs themselves. According to a  hypothetical study  based on a company of 10,000 employees, if 10% of its workforce were laid off, voluntary quit rates could increase by 49%, leading to significant costs to replace these individuals, often amounting to 1.25 times their annual salary. Americold Realty Trust could face similar challenges, requiring careful planning to mitigate these long-term costs.

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Legal and Compliance Costs for Americold Realty Trust

The legal framework related to layoffs is complex and varies by state. Companies like Americold Realty Trust engage external experts to ensure compliance with employment laws and to minimize the risk of discrimination lawsuits. Labor economists like Mike DuMond from the Berkeley Research Group often conduct several rounds of demographic analysis to ensure layoffs do not unfairly target protected groups. Additionally, the costs related to legal compliance, including the requirement for WARN Act notifications for mass layoffs, add another layer of expense.

Conclusion for Americold Realty Trust Employees

The decision to proceed with layoffs, although often seen as a necessary step to cut expenses, involves many hidden and delayed costs. These encompass not only direct financial burdens such as separation and legal fees but also long-term consequences on employee productivity and Americold Realty Trust's reputation. Understanding these complex dynamics is crucial for Americold Realty Trust when contemplating workforce reductions as a strategy to cope with financial difficulties.