If you were about to lose your job?

OK, here the deal. My company is feeling the effects of the economic downfall of the past 12 - 18 months. I'm faced with the reality that I can't afford both my current payroll and business expenses. One or the other has to be cut. At $75,000 monthly sales, I can easily afford six employees. But, at $50,000, I can't. I've made a decision to let two of them go. The remaining four can easily handle the current workload. I hate it, I really do! But by doing this, I will free up $5000 a month to throw at other bills.

I've had to fire people before when they deserved it, but this is different. I'm not necessarily "FIRING" them. I was planning on approaching the issue more like, "I can't afford to keep you on the payroll right now, so I must let you go until things pick up." I would certainly ask them back when things picked up if they were available.

I thought about it all night, but anyway you look at it....it fuckin sucks! They like their jobs and I like them!

My question is this: (How would you wish to be told if it were you?) Should I sit them both down together or do it individually? I could get my manager to do it, but I think it needs to come from me. I planned on doing it tomorrow afternoon. Any thoughts, ideas, or opinions are appreciated!

 

You need to sit them down one on one and look them in the eye when you let them go. I would really consider keeping everyone on and cutting their salaries. $75,000 is good money, $50,000 is better than the door.

 

Individually! Personally I would hate it if I got that kinda news next to the other guy that's getting the same. The individual attention may help to convince them that you really care (obvious by your post, not as much from their perspective) and maybe it would be easier to take. Just my 2c.

 

Ditto.

 

A one on one with the actual person making the ultimate decision is what I would want, and honesty on why. Im sure that alone would encourage them to come back if things allow you to ask them to come back.

 

I've had to do that and it does suck. It's easy to fire someone when they desreve it, but layoffs are truly difficult. Do it individually and with sincerity, it will lighten the load a little.

 

Good on you for thinking about doing it yourself- and deffo do it individually. Leaving that opportunity open for them to come back when business picks up and/or offering them letters of recommendation to help them along their way.

Good luck man...sorry it's gotta go down like that.

 

Jimmy maybe you could let them know and give them a grace month or so to be looking for another job while still working for you. That way if they have a family and stuff they won't be hit cold turkey. Of course i'm not in your situation and you may have to do it sooner than not, but if they are getting paid decent by you it may be hard to find a job to match or get close to what you may be giving them. Either way you are in a tough situation but i'm sure they will know the sincerity of your not wanting them to go.

 

I can always tell when bosses are lying to me and it sucks. Be honest. In this current economic climate they will probably understand. It's a shame so many people are losing jobs, especially at small businesses. They are the backbone of what makes this country great. Good luck.

 

How long do you plan to give them to find another job? I assume (hope) you're not sitting them down tomorrow and telling them for the first time, then expecting them not to come back on Monday. I don't know if there are laws or anything, but I'd give them 2 weeks or so.

I agree w/ most of what's above. I'd want a one-on-one with the person making the decision, and I would want honesty about why it was being done AND about why I was being chosen as one of the people being let go.

 

In Rhode Island some companies have worked a deal with the state unemployment agency. Rather than laying off people during a slow down they have reduced the company work week to 24 or 32 hours and and the state gives the workers a benefit that makes up the lost wages. It's not the right answer for everyone but in the cases it works it seems to be a pretty good solution for (hopefully) short term difficulties.

 

are they in sales? you could offer them straight commision or something like that.

also, if i was going to get laid off, i would love two weeks notice, at least. that will give me a little time to get my affairs in some kind of order and maybe change my budget. Employees are expected to give two weeks - it is nice when it comes from the employer too.

 

I admire you Jimmy for wanting to handle this yourself.

As far as how to tell someone, I think it has been covered quite well above.

I'm not a buisness owner but here is my low value take.

Assuming all 6 are of equal value to the company, and you have a decent relationship with all of them. I'm also assuming they all make about the same salary. For this posts sake, just assuming you haven't targeted 2 for dismissal yet, here is my take............

I crunched the numbers, and maybe you could try a dual wave re-organization.(this is how I've seen big industry HR handle tough situations)

You said you wanted to handle this yourself, so this would come from you also.

Wave 1: They will understand your decline in buisness, so explain to continue to be successful, you need to make a 30% (wouldn't that be close to the $5000 you need a month?) pay cut for each of the 6 employess. If this is not feasable to them, then your hand would be forced to dismiss 2.(game over) If there are 2 already on the fence as far as performance, this would probably not work.(they could get targeted by the others)

Wave 2: It could then be explained this is temporary and could go 1 of 2 ways down the road. Either when buisness picks up, wages could be restored, or if buisness gets worse, then a possible release of employees.

To me this would show an intentional effort to preserve their position with your company.

Here at Cummins many are down to 32hour work weeks. That would be almost a 25% pay cut from a 40 hour work week. But considering most of those people were used to working about 60 hours a week in the summer, their pay was reduced by much more than 30%. I can actually list many other local factories that have cut back to 32 and sometimes 24 hour work weeks.

You said 4 could easily handle the load, so cut all 6 of their hours along with pay and tell them its more time with their family right now. Also you mentioned cutting salary or expenses, you only posted about salaries, are expenses already squeezed as tight as possible?

Didn't mean to dig or get personal, but you asked for thoughts, ideas or opinions.

Sorry if this wasted ya'lls time, I'm bored, so I played with the numbers