Layoffs & Organizational Decline Layoffs in a variety of organizations High technology Financial services Consumer goods Entertainment

Lessons Learned From Atari What do you think?

Hewlett-Packard Drop in orders HP’s response Need to cut pay by 10% and cut back production by 10% HP’s response Cut pay by 10% Everyone from the president to the lowest paid employee Stay home every other Friday Why not just lay off 10% of the workforce?

The Layoff Choice Layoff first, ask questions later 6% tried cutting pay 9% tried shortened work weeks 9% tried unpaid vacations 14% tried sharing

Other Alternatives to Layoffs Unpaid leaves of absence Few takers Hiring freezes Within firm transfers Move employees from declining unit to a healthy unit

Conducting a “Kind” Layoff Treat people with the same respect and maturity when you fired them as you did when you hired them Severance pay Job search assistance Use of company e-mail and voice mail Use of company computers What about theft and/or property concerns? Most people have saved key listings, other information on their home computers Fair treatment reduces potential for violence

Organizational Extinction / Plant Closings Closing ceremonies Need for psychological closure and understanding Managers feel extreme sense of guilt Explain the best they can Offer job search help Social concerns Phone number exchanges, promises to get together Set date for reunion