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The ethical implications of this question become much more obvious if you translate it from the jargon intended to obscure the underlying realities to simpler English. Assume you have a reasonably good estimate of your human resource needs for the next year. There are three possibilities: staffing levels will stay the same, you will need to hire more people, or you will need to lay off people. If you need to hire people, it makes good business sense to inform employees so that they can circulate that information by word of mouth – it's an inexpensive way to increase your applicant pool. If staffing needs will stay the same, there is no reason not to circulate the information freely. The ethical dilemma appears in the case of impending lay-offs. From a pure business perspective, you might worry that news of impending lay-offs will cause people to leave the company if they can, and probably be more focused on getting a new job that working hard at their current one. On the other hand, waiting until the last minute to inform people that they are losing their jobs is ethically questionable as it leaves them less time for a job search and for long term financial planning. Pehaps the most ethical solution is the one taken by most German firms during the past recession, which was to avoid layoffs by implementing across the board four day work weeks. This made good business sense because when business picked up, rather than need to hire and train new staff, they simply returned to normal work weeks.
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