The Problem Of A Firm 's Financial Performance And The Downsizing Of The Workforce

As the economy continues to be unstable companies, large and small, are making decisions to reduce their workforce. This is a daunting task that has to be handled delicately. When companies begin the process of reduction, even if the staff is aware, the communication must be honest, open and appropriate. If a company is a large retailer there is more at stake than just the current financial situation. The employees can become customers and advocates for the business. They can also become the customers of the competitors and communicate to others the bad experience. In 2006 Radio Shack was on a turnaround plan (O’Rourke, 2010). This plan included a reduction of workforce of about 400 employees. Employees were aware

* Downsizing: Reduction of the business portfolio by eliminating products and businesses units that aren’t profitable.

When DGL International, a manufacturer of refinery equipment, brought in John Terrill to manage its Sales Engineering division, company executives informed him of the urgent situation. Sale Engineering, with 20 engineers, was the highest-paid, best-educated, and least-productive division in the company. The instruction to Terrill: Turn it around. Terrill called a meeting of engineers. He showed great concern for their personal welfare and asked point blank: “What’s the problem? Why can’t we produce? Why does this division have such turnover?

Downsizing refers to the voluntary actions on the part of organizations to reduce the overall size of their workforce, generally to reduce costs. The disadvantages of downsizing in a survey by the American Society of

The layoffs are at the heart of the problem affecting the hospital. From the CEO’s perspective, the layoffs are a response to decreased revenues where the facility has to reduce its expenses to stay in operation. In the case of the operations director, the layoffs are a cost-cutting measure and an appropriate response to reduced activity in the hospital. However, the employees are likely to interpret the situation as a lack of proper management or concern for their welfare (Sobieralski & Nordstrom, 2012).

Layoffs are an inevitable part of any business that affects both employer and employees. Companies usually decide to do layoffs when they have financial problems such as a decrease in their profit, or when they want to reduce their cost by reducing a number of employees. Laying off employees is one of the toughest decisions that management has to makes. Employee reduction is a decision that must be made carefully and with cautious because it not only involves legal issues, but also affects moral in the company.

Sronce, R. & McKinley, W. (2006). Perceptions of Organizational Downsizing. Journal Of Leadership &Amp; Organizational Studies, 12(4),

Riordan Manufacturing needs to include their HR division on decisions that are made throughout the company and discovered through surveys. The company has a communication barrier leaving out the HR division because of the department isn't aligned to the President of the company, Michael Riordan. Michael Riordan needs to communicate to the investors how he is planning on improving sales and profits. His staff is scattered and lost. Charles does not believe there is enough time. Sales is continuing to decline, as they have for the past two years, and the switch to customer-focused teams is proceeding slowly, thus suggests revamping the sales incentive system. Kenneth would like to add incentives for R&D staff. His rationale is that R&D staff is now expected to support the customer sales teams, so they should earn incentives when those sales are completed. Maria believes that IT staff is underpaid

Downsizing, this is brought up when there is law demand for the companies’ products at a set cost. Downsizing brings to light a loss of jobs, which increases the unemployment rate and in turn effects the economy as a whole for both the working and unemployed. (Hassin, 2010). On top of that, while the organization downsizes in employees, the production requirement does not, leaving the same amount of work to be done with less manpower to achieve the task.

A corporation needs to have a strategic plan in place in order for them to be able to implement a downsizing. There are many pros and cons to downsizing and it has a ripple effect on everyone in the corporation. Depending on the planning of the downsizing, one of the big issues to decide on is how to choose who will be terminated. For example, do you go by seniority, a percentage from all departments, an entire department, or by job level or position? These are major options that need to be addressed before anything happens. Most corporations today exist less for the well being of employees than they

Datatronics is an organization that serves their customers with Enterprise Resource Planning integrated solutions. Their growth is mainly attributed to acquisitions of smaller competitors. E-Z RP was such a company that despite its inferior size compared to Datatronics was able to succeed and outperform Datatronics on grounds of customer service and customer satisfaction. Datatronics recognized the fact and acquired E-Z RP with the aim to improve in that respective area. Just as it is the case with most acquisitions, job uncertainty at E-Z RP came into question when the acquisition was announced, however, all of the employees were able to remain employed. The issue was that most of the positions E-Z RP

Developing a rationale and process for selecting individuals for a layoff is no easy task, and it is fraught with legal and ethical pitfalls (Fallon and McConnell, 2007). Layoffs can result from a wide variety of economic, societal, and technological change. Whenever possible, alternatives to layoffs should be fully explored and considered. Alternatives to layoffs include force reductions through attrition and eliminating any part-time positions in favor of retaining full-time employees. Early retirement is also an option as many employees may be willing to leave the workforce voluntarily with an incentive. Pfadenhauer (2009) recommends making any layoff decisions by analyzing future organizational needs and not by considering any

Downsizing has become a commonplace strategy for organizations to adopt in an effort to cut costs, eliminate redundancies, and streamline organizational systems. Over the last 15 years, many organizations have engaged in downsizing more than once. Most companies have learned from the mistakes of the past, but some companies are still trying to use the same tactics today that were used in the mid 1980s, that leave employees reeling.

The reenergizing employees after a downsizing case study, explains the potential effects of downsizing a company, on both employees and the manager. Andrea Zuckerman is the editor in chief of Blaze and the person who must relay the message to the entire company. It is made clear throughout the case that Andrea does not agree with this downsizing and feels that it is wrong. However, due to the newspaper industry dwindling away and many people now reading the news from a mobile device, it must be done. Andrea’s biggest conflict is figuring out how to properly explain this downsizing to employees, as this is no easy task. The “new normal” that will be implemented consists of merging the five areas of reporting into either two or three. As said, explaining this situation to employees in a reasonable and understanding manner will be a complex task.

Downsizing, restructuring, rightsizing, even a term as obscure as census readjustment has been used to describe the plague that has been affecting corporate America for years and has left many of its hardest working employees without work. In the year 2001 we had nearly 1.8 million jub cuts, that’s almost three times as much as the year 2000(Matthew Benz). In the 1990's, one million managers of American corporations with salaries over $40,000 also lost their jobs. In total, Fortune 500 companies have eliminated 4.4 million positions since 1979 including the 65,000 positions cut in February of 2002 (Ellen Florian). Although this downsizing of companies can have many reasons behind it and cannot be