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HBS: Layoffs

Blog 1-16

Due: 4-21-11

HBS: Layoffs

Any company has economic scenarios with ups and downs during its lifecycle; in that sense, how it can be faced will depend on its manager. Indeed, the central purpose of any manager is maintaining a lasting and stable growth in his or her firm. However, sometimes managers blindly adopt the “easiest and cheapest decision” in order to resize their company by cutting costs relied on layoffs such as Astigo Holdings Company’s strategy. This decision along the business history lots of times has resulted being prejudicial for companies because this creates an unstable context not only for companies, suppliers, customers but also for workers because these circumstances are directly correlated to workers’ morale and productivity, definitely. With this in mind, managers, in a difficult scenario, should be more creative and imaginative in order to solve their competitiveness by taking appropriately measures.

In truth, to dismiss workers for either a “first-in, first-out” policy or “last-in, first-out” policy strategy is a strong and extreme decision for the companies because this does not ensure the success of a company; on the contrary, this measure affects the entrepreneurial environment. Managers think that this could generate enough savings, which could be perhaps on the short-run, but this does not have a support over time in which this will be more expensive on the long-term. Besides, aside from this, the main problem is that the company proximally will not have credibility from its customers, suppliers, and even from its shareholders too. All this puts in a difficult situation to the company in terms of recovering its competitiveness and credibility. Consequently, in this outlook, managers’ decision would be wrong wherein they would handle to their organizations from “cradle to grave.”

In fact, for being more competitive in our organization, we should not necessarily reduce to workforce. The layoffs are a last resource. It means when a company does not have any solution managers should mandatorily rethink about that for defining “who goes, and who stays.” This is because a company invests time and money in recruiting contestants for “getting the right people in the right slots.” Likewise, of being the case and if we are “in an alley without way out,” we as managers, should combine these layoffs between old and new blood. The percentage would depend on collateral factors, but I believe by 40 and 60% could be a good decision. Nevertheless, to be honest, I do not share the idea to lay off workers because this synopsis negatively affects in our companies. Rather, we should seek high performing of our workers as well as competitiveness in our companies by designing workable, suitable, and sustainable strategies. All this does not to throw our endeavors to the overboard, which would seem being the case for Astrigo Holdings firm.


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