AFTER THE LAYOFFS, WHAT NEXT ?

Presented By : - Group 1

Anand Sivakumar J 12PGP007Bhairav Mehta 12PGP013Bir Bahadur Singh 12PGP014Karan Jenaw 12PGP020Llewellyn Fernandez 12PGP023Prateek Singh 12PGP110

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AGENDA

Facts

Issues

Analysis

Conclusion

Recommendations

04/11/2023 Indian Institute of Management Raipur

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Facts

Issues

Analysis

Conclusion

Recommendation

Delarks is a 28 store retail chain with shops in small and mid size cities.

Harry Denton was appointed as the new CEO of Delarks.

Denton did his job well, achieved huge leaps in revenues of nearly $400 m.

To achieve this, he laid off around 3000 employees as a part of restructuring.

Due to this, the office culture has been disturbed.

04/11/2023 Indian Institute of Management Raipur

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Facts

Issues

Analysis

Conclusion

Recommendation

After layoffs, an employee satisfaction survey conducted by a consulting firm indicated that employee satisfaction is on the positive side.

But the employees morale has gone down

A meeting was called with the employees in St. Paul, Minnesota to address their problems, where all 600 people were invited.

Crowd’s reaction showed that they are unhappy.

04/11/2023 Indian Institute of Management Raipur

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Facts

Issues

Analysis

Conclusion

Recommendation

Employees were fired without any prior notice.Employees were not consulted before taking such a huge decision.Employees lost trust on the Company and living in the fear of getting fired any time. Firing of employees like Mae Collier who had been working in Delarks since its inception made other employees angry.Defection of Rachel Mayer, Head of Merchandising and there are rumors that other executives may follow.Denton had the fear of other employees leaving and joining competitors anytime.Fired on sole basis of work inefficiency and misfit.

04/11/2023 Indian Institute of Management Raipur

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Facts

Issues

Analysis

Conclusion

Recommendation

The decision taken by Denton was important considering the present financials of the company.

The way of communicating the lay-off message was not proper.

The company either don’t have any concrete HR Policy or it is not properly communicated.

Though a fair severance package had been provided including 2 months pay and 1 month free outplacement services, employees still feel what the company did is unfair.

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Facts

Issues

Analysis

Conclusion

Recommendation

Closing down the restaurants and consolidation half-empty distribution centers was widely understood and accepted.

But firing of old employees showed that company didn’t value any loyalty. They could have offered them Voluntary Retirement Scheme, explaining the necessity.

04/11/2023 Indian Institute of Management Raipur

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Facts

Issues

Analysis

Conclusion

Recommendation

Harry Denton fulfilled his obligation as a CEO.

Employee morale was very low.

Competitors may use the situation of distrust to pick the top performers from Delarks.

The firing solved the problem for the short term but in the long term the company might suffer.

04/11/2023 Indian Institute of Management Raipur

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Facts

Issues

Analysis

Conclusion

Recommendation

Communicate - quickly, openly, honestly. Allow for their emotional response.Address work frustrations due to the layoffs by implementing award programmes. Focus on Career Development and Building Self-Esteem for Layoff Survivors in a Downsizing and long term interest in their careers.Implement a Firing Freeze- Assure that there will be no further layoffs.Hire a third party consultant to assess the New Environment and implement the changes.Hire some former employees once the financials get improved.

04/11/2023 Indian Institute of Management Raipur

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Strengths Weakness

Company culture will improve Implementation will involve some additional cost.

Employees morale will be boosted

As it is a long term solution, it will take some time to rebuild employees trust.

Long term sustainability which is good for company financials.

Have to face the initial hostile behaviour of employees.

Top performers can be retained and it will also attract best talent from competitors.

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