On Sept. 12, 2001, there were no commercial flights in the United States. It was uncertain when airlines would be permitted to start flying again—or how many customers would be on them. Airlines faced not only the tragedy of 9/11 but the fact that economy was entering a recession. So almost immediately, all the U.S. airlines, save one, did what so many U.S. corporations are particularly skilled at doing: they began announcing tens of thousands of layoffs. Today the one airline that didn't cut staff, Southwest, still has never had an involuntary layoff in its almost 40-year history. It's now the largest domestic U.S. airline and has a market capitalization bigger than all its domestic competitors combined. As its former head of human resources once told me: "If people are your most important assets, why would you get rid of them?"
It's an attitude that's all too rare in executive suites these days.
Corrections suggests that organizational/firm-specific capital or search costs can certainly be a reason for labor-hoarding. However, concluding that firms should not lay workers off because firms that don't lay off workers are successful is like concluding that firms that don't declare bankruptcy are the most successful firms--therefore they shouldn't declare bankruptcy. The rest of the article provides nothing but economic sound and fury, signifying nothing.