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Workforce Downsizing: The Newest Challenge for The New Economy

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Workforce Downsizing: The Newest Challenge for The New Economy

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    1. © G. Hinrichs, 2003 Workforce Downsizing: The Newest Challenge for The New Economy Employee Relations – HRM Session 10

    2. © G. Hinrichs, 2003 Recent Layoffs Statistics January 2003 layoff notices -- Most in 8 years Feb-March 2003 -- 66% increase in tech-related job cuts Not just dot-coms -- Disney, GE, Toshiba, Daimler-Chrysler, Whirlpool, Proctor & Gamble, Gateway, IBM Unemployment trending up

    3. © G. Hinrichs, 2003 Doing It Right -- What's The Big Deal? Business/Operational Impact Reducing in the right areas Reducing the right employees Impact on Morale of Remaining Employees Public Relations/Customer Relations Impact Litigation and Litigation Costs

    4. © G. Hinrichs, 2003 The Cost of RIF-Related Litigation $13 Million settlement for a class of former employees alleging age discrimination in a series of layoffs in the early 90's. $5.5 Million jury award to one employee claiming sex discrimination in a layoff of 100 employees. $1.2 Million jury award to one former executive alleging age discrimination in a layoff. $4.1 Million settlement to 11 former employees alleging age discrimination.

    5. © G. Hinrichs, 2003 Goals For Every RIF Achieve necessary reduction targets and other business goals Retain essential talent and skills Complete RIF in a timely manner Support affected employees Communicate effectively with employees, customers and others Comply with all laws and regulations

    6. © G. Hinrichs, 2003 To: <<Human Resources>> From: <<CEO>> CC: <<Legal>> Re: Cost Reduction As you know, we must reduce our overall operating costs by $10 million over the next fiscal year. After taking all other possible cost-cutting measures, the Company has determined that $5 million must be reduced through a reduction in headcount. The area targeted for reduction is Sales & Marketing. Please advise as to how we should proceed with this reorganization process. URGENT!

    7. © G. Hinrichs, 2003

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