Case Study: After the Layoffs, What Next?

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"After the Layoffs, What Next?" is a case study involving the aftermath of the downsizing of Delarks, a Midwestern clothing store chain. In this case Harry Denton, the architect of the downsizing, is able to orchestrate a considerable financial turnaround, but in so doing he alienates most of Delarks' remaining employees and most of Delarks' upper-management. Denton is an inexperienced CEO whose management experience rests solely in managing a national chain's flagship store in New York. Though Denton's restructuring of Delarks' business model will cause Wall Street to take notice and toast Denton's efforts, his inexperience may in the end eventuate in Delarks' collapse. Delark's downsizing was done in a rather abrupt way in which most laid-off employees were entirely unaware that they were about to lose their jobs. The problem Denton unknowingly faced was that the employee-pool at Delarks was very tight-knit where members felt as if they belonged to one big satisfied family, and the unexpected lay-offs caused great distress within the company.

Denton's style was fairly secretive, and they way in which he fired employees without notice created an atmosphere of insecurity and enmity among the employees in Delark's twenty-eight Midwestern stores. His main mistake however, was to close the chain's Madison Wisconsin store without notifying anyone, including his closest associates, and he thus further fostered an atmosphere of mistrust in Dalark's upper-management. This

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