Using the theory of three stages of short-term production, this paper explains the significance of implementing the reform of reducing staff and increasing efficiency in state-owned enterprises in China Under the action of Parkinson's Law, there is an inherent impulse to continuously expand its own scale, which further expands the demand and makes the labor demand in a long-term position. Under the spillover effect of labor force, employees are lazy, irresponsible and have poor service attitude, which is seriously stagnant under the productivity of labor force.

Layoff can reduce the labor cost of enterprises, improve the utilization rate of human resources, improve the economic benefits of enterprises, stimulate the vitality of enterprises and increase market competitiveness.