One of the Fortune 100s that recently was in the news because it intends to layoff thousands of employees apparently saw, and ignored, the "writing on the wall."
A few years ago I read that this company's US business was dropping off.
Its international business was OK, but at home neither it nor its competitors were setting sales records.
We live in an international economy.
When we do OK financially in the US, most of the rest of the world does likewise.
When our economy goes sour, most of the rest of the world economies follow suit, later if not sooner.
I have to wonder if, had the Fortune 100 accurately read economic trends, it would be necessary to lay off "in one fell swoop" the several thousand soon to be heading for the dole.
Could layoffs have been avoided?
Probably not.
Could the number of laid off people been reduced? Probably, by attrition.
The shop is unionized so the company had to cooperate with union leaders.
What would have been better, I think, is for the company to have done a couple of things starting back when the US market started to tank.
1. Allow, when possible, attrition to take its toll. There is a limit on this, and as I wrote earlier, the union has to be in agreement.
2. Lay off people in smaller numbers. This would allow other employers, both locally and nationally, to absorb some of the furloughed personnel. It also would allow younger people to retrain out of the industry without putting a burden on trainers (so the training organizations would not have a short-term employment bump only to have to lay off their personnel later).
Granted, hind sight is a wonderful thing.
But, based on what I know - and admittedly I am not privy to this company's inner workings or the union - it seems some of the pain could have been if not avoided at least mitigated.
I'm reasonably certain this company has "business continuity." Maybe even "real" business continuity, but I suspect that either the planner was not privy to the company's inner financial workings (although the drop in domestic sales was public information) or if the planner was privy, the planner either failed to warn management or management failed to heed the warning.
The company is headquartered in a relatively small town which means that not only will the people laid off suffer, the entire community will suffer with the ripple (domino if you prefer) effect.
I get laid off. I can't pay my mortgage. Buying food for my family has to be restricted - more peanut butter, less steak. That new car I was considering no longer is possible. The home improvements I intended to start with materials from the local hardware store will have to be put off. Our weekly night out is cancelled.
My visit to the doctor will be limited to emergencies and I may start skipping some of my medications.
Now, multiply my plight by n-thousand others and you can begin to see the impact this massive layoff will have on the community.
If that isn't bad enough, the company's vendors will see lower sales and they, too, may have to lay off people.
I am not an economist and I don't play one on tv.
I am smart enough to know that economists are SMEs that need to be included in business continuity plan development - along with Legal, HR, Facilities, InfoTech, Shipping & Receiving, Production, Sales, Marketing, and all the other profit centers and profit center resources.
It was no secret this public company's domestic sales were off.
Why nothing was done when this became known is something known only to the company's management.
It's a good company; it has the benchmark products in its industry (and consequently is the target of its many competitors).
I hope the layoffs are short term, but I have my doubts.
If nothing else, maybe we all can learn some lessons from this unfortunate situation.
We need to learn to read the writing on the wall.
Management needs to be candid with the enterprise risk management/business continuity practitioners, and it would be wise to solicit and listen to the practitioner's advice.
Maybe the layoffs were inevitable, but maybe, just maybe, the impact could have been mitigated.
John Glenn, MBCI
JohnGlennMBCI @ gmail dot com
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