Business Masala: downsizing and layoffs

Frank quite openly describes himself as what might be termed a manager of the ‘old school’. He believes in truth, honesty, integrity, business ethics and that there is basically a right and a wrong way to do things when dealing with people – including one’s co-workers.

Specially when it comes to downsizing and layoffs, his views are very human-centric, and believes that often times its is the hardworking and lower costing staff that pays for the strategic mistakes.

He’s no great age but is now widely regarded as something of an embarrassment and a bit of a dinosaur by the up and coming hard-nosed guys around him. The trouble is, he asks awkward questions when decisions are made – including that most despised sentiment in modern business “are we doing the right thing here?”

He’s made mid-management level but was doomed never to go any further for the above sorts of reasons. He knows he is widely regarded as ‘dead wood‘ by many of the dynamic and thrusting younger managers around him. He also knows that there is open speculation as to how he’s kept his job for so long.

The answer to that question is straightforward – unusually for people in management positions in his company, he actually knows his trade as a true subject matter expert.

His expert knowledge is his life jacket and negative things about him from a corporate viewpoint, such as his basic decency, are tolerated by his employer because of it.

Past times

As a young ‘un, Frank says he cut his teeth as a programmer in the company back in the days when the Head of IT had actually come up through the ranks and also knew her trade. She was a believer in plain speaking and open dealing with colleagues and third parties.

So, he picked up many of those values from the culture she had inspired.

That’s now ancient history of course. The current Head of IT (now called Chief Information Officer) has an MBA and proudly boasts of not knowing very much about IT itself. He does proclaim himself to be an excellent generalist all-round leader though – so that must be OK.

The CIO also plays pretty snappy golf – apparently quite frequently with the CEO and CFO. Presumably they call their clique “the acronyms”.

Over the past couple of years, the CIO has launched a number of quality improvement initiatives. Frank was one of the few who didn’t enthusiastically and loyally applaud these initiatives at the outset. Showing his lack of political awareness, he’d said that until such time as the CIO was able to define in detail what he meant, rather than utter Pious Statements of Good Intent, he couldn’t either approve or disapprove.

The truth dawns

He says that he very quickly spotted that the ‘quality improvement initiatives’ essentially meant trying to find spurious justifications for firing in-house expensive personnel and moving their work overseas to low labor cost economies.

Frank asked all the usual embarrassing and disloyal questions about just how this was all going to work and how they would avoid losing critical skills in certain areas.

The CIO produced his masterpiece in response – a bell curve distribution chart showing annual appraisal grades across the company. Apparently, quality improvement meant redefining the criteria for the mid-point average (i.e. lifting it upwards) on annual performance appraisals, then firing, more or less at random, about 25% of those that fell below it.

Intimidated by the massive intellectual prowess behind the scheme, Frank had little choice but to comply.

Firings commenced shortly afterwards and the company showed its new quality oriented spirit by:

• posting up a list on HR intranet forum of employees who had been “de-emphasized” – or fired as any human being would have called this downsizing and layoffs exercise. The memo stated that amicable severance packages had been granted and counseling provided. Unfortunately, somebody had forgotten to tell two of the people concerned and the first they knew of their job loss was when they read their own names on the list;

• a few weeks later the second wave of slashing and burning took place. Initially the ‘list of heads’ was regarded as top secret, except that person in charge of office seating was asked to draw up a new office plan for desk allocations, with a large number of names notably missing from it. So, he and his colleagues knew well in advance who was going. Interestingly enough, he noticed that in the new plan he also wasn’t to be allocated a desk. Still, at least he got plenty of notice of his pending demise;

• learning from the first noticeboard fiasco, the CIO decided to make this process much more human. After the second wave of people were called from their desks to be notified of their departure, all remaining employees were called together to hear a speech from the CIO. During that he read out, with due solemnity, a list of those that the company had graciously “given the opportunity to explore new directions”. One guy listening to this in the audience was less than impressed, as he heard his name being read out. Yep, yet again, HR had actually forgotten to tell him that he had been fired!

A few months later the CIO called in some very expensive consultants to analyze and report on what he perceived to be low morale in his division. He was baffled as to why that was apparently the case and was looking for ideas.

The dust settles
Today, Frank says he is one of several managers trying to cope with totally inappropriate staffing levels. More importantly, some of the people fired took with them absolutely critical skills that could not be replaced.

Although lots of the work has been outsourced overseas, control of the organizations concerned is virtually impossible. He’s also now subject to unilateral price hikes. The trouble is, the external suppliers know full well that they now have a captive customer.

Flushed with his success, the CIO is in the process of moving on to greater things and is shortly leaving to head up a motor parts manufacturing operation. Seemingly, he is proudly telling anyone who will listen to him that he knows less about the motor business or manufacturing than he did about IT.

So, his new company’s future looks secure.

Meanwhile, Frank continues to try and do the best he can for his company in an impossible situation. Given his self-evident lack of talent, it’s real lucky for his company that he never made it to anything even remotely close to an executive position.

My regular disclaimer: downsizing and layoffs and Frank is a figment of my imagination. To protect the innocent all names have been changed, characters combined and events compressed. Certain episodes are imaginative recreation, and those episodes are not intended to portray actual events.