Firms have been advised that making redundancies should not be their first course of action if they are trying to cut costs during the recession.
According to the Chartered Institute of Personnel and Development (CIPD), other options such as recruitment freezes and offering staff unpaid leave may be a better option.
This comes after a survey conducted by the organisation revealed that firms saved £27,000 per employee by terminating contracts with temp agencies and halting recruitment.
However those which made redundancies saved an average of £16,400, Management Today reports.
The website added that redundancies can also be unwise as staff will be needed to drive business and capitalise when the economy picks up again.
Last week, it was announced by retailer JJB Sports that in order to reduce its debt and protect up to 12,000 jobs, it has negotiated a deal to sell its 55 health clubs across the UK.
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