The Layoff

I just read an HBR case study entitled “The Layoff” written by Bronwyn Fryer with help from Stybel, Peabody, Dormann, and Sutton.  The subtitle says, “If Astrigo Holdings is to remain competitive, 10% of it workforce must be cut.  Who goes and who stays?”  The case study starts off with a brief history of the Astrigo Holdings and their emphasis on customer service, customer loyalty and their employees.  But the main part of the study is the layoff and the problems that come with it.  The layoffs are inevitable it is just “who goes and who stays.”

Is it going to be a forced early retirement to the most loyal of the employees, performance-based layoff to get rid of the bottom 10%, or is it going to be the brand new, up and coming, highly-recruited new employees?  The early retirement package is going to be expensive, the “rank-and-yank” causes a lot of competition, politics and requires a lot of work, and the last in, first out is seniority based and is the easiest to do.

This is a new study, so most of us know all too well the financial problems we are facing right now.  At this time there are layoffs happening all over the U.S. as well as the world.  The morale at some companies is low because there are a lot of businesses that are hurting and they are forced to either cut jobs or shut down just to stay afloat.  They explain this when Julie Cox, an internal PR representative, came into Sushil Bhatia’s office, the VP of marketing and strategy, and asked him about the layoffs.  Her husband was just laid off and their employee’s morale has been extremely low.  She ultimately thought her job was safe, but what bothered her even more was the fact that she was going to be one of the people laying off the 10%.  She knows how it feels to lose a job and she is going to have a hard time doing it to others and dealing with it herself.

In my personal opinion and experience I think the best way to do it is the “rank-and-yank” option.  My boss just laid off over 30 people and he used their evaluations and their attendance to come up with his list.  The hard part about “rank-and-yank” is finding the documentation of the poor performers. Regardless of age or experience if Astrigo has the documentation they can lay them off without the fear of a lawsuit.  The other thing is that they were going to lay off the middle management, so most of the top managers should already have an idea about who goes and stays.

I would like to say to anyone reading this I feel really bad about what had to happen at Astrigo Holdings.  This is an assignment for a class, so I am sorry if I offended anyone.  I know what it feels like to lose friends at work because of cutbacks.


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