Terms Management Used When Down-sizing

While I was surfing for information about the industry I work, I came accross an article about a media agency planning a major restructuring of its U.S. operations, including an undetermined number of layoffs. However, the news was accidentally released by the agency's top New York-based HR executive e-mailed via memo to the entire agency that appeared to be intended only for senior managers. It must be a dreadful event for her. Anyway, there was no mention of disciplinary action taken as a result of the e-mail mishap. Maybe they have learnt the lesson and ke[t it closed door.

In E-mail Blunder Alerts Carat Staff to Major Restructuring, you can download the powerpoint presentation and a "messages" template/guide to how staff should be told of their fate and what should be said to their still-employed colleagues, clients and vendors.

In today's business world, words like right-size to replace downsize, integrated organization means combine department or offices, centralised means close some department or offices and combine the remaining employees into one department. In the powerpoint, there are script provided when handling those involved in the retrenchment. Script how the affected should be handled. Example: "If you would like to go home today and come back tomorrow to clean out your desk or office, you are free to do so. We would like you to meet with your manager following our meeting to transition your work. We will be communicating to your team today. Your manager will be contacting clients. We ask that you do not contact your clients to discuss this situation."

The management even has a script prepared for executives and managers when handling their recently joined colleagues who question their career path with the company. "Let them know we are building for the future," it read. "The actions we had to take, although unfortunate, were necessary to right-size the company and ... bring in the skill sets we need to effectively service our business and future client needs."

For their clients, they have this to say: "Mary Smith will be moving off your business. Now that we understand your business better, we are replacing her with someone whom we feel will be a better partner for you." The document offered an alternative for times when the "staffing change" affected a longer-standing relationship with the client: "Mary Smith will not (sic) longer be working on your business. In order to serve you better and provide greater innovation we have made a staffing change to your business." All pre-prepared. Easy, but sad huh...

You can read the memo and powerpoint presentation here. I personally experienced similar situation once during 2002 when I had to lay off 90% of the team in our sister company. There were about 100 employees and I was seconded to the company. I can only keep 6 team members and had to let go of the rest. Our clients are declining too (same as the article here) and after a years of minimum income, we are force to closed the sister company and "centralised" the remaining staff to the main company.

My manager and I informed team mates of their fates face to face in a staff meeting. There was a Q&A session. That was the toughest time I experienced. Although I was so much younger with no commmitment, I felt really bad because some of the staff have family and commitment. We also compensate them by providing 2 months salaries and staff can gave staff workstation to them. We have in mind that they could probably do some freelancing while looking for new job. So we provide them the tools.

Now 2008, the economic crisis seems to be far worse than 2002 and it has been compare to the great depression in US which started from the end of 1929 until the early 1940s. Beginning in the United States, the depression spread to most of the world’s industrial countries, which in the 20th century had become economically dependent on one another. The Great Depression saw rapid declines in the production and sale of goods and a sudden, severe rise in unemployment. Businesses and banks closed their doors, people lost their jobs, homes, and savings, and many depended on charity to survive. In 1933, at the worst point in the depression, more than 15 million Americans—one-quarter of the nation’s workforce—were unemployed. You can read more from the link.

In my personal point of view, we are facing towards that again. We have seen banks closed, airlines bankcrupted, home mortgage fell and people has very little or no saving. Unemployment is very high all over the world. Well, I've been keeping an eye on our Malaysian banks at the moment. Altough my saving is insured up to RM60K per financial institution, there was never a dry run and I don't know how long before I can get my money back. So better cash out if I see signs of instability. What do you think?