15.22 All-Weather Case: Communicating Layoffs
15.22 All-Weather Case: Communicating LayoffsDoug, Caleb, and Tanner are huddled in the small conferenceroom to discuss what none of them (includingDoug) has ever had to face before: layoffs. Erin, whoseduties include terminations, would have been presenttoo but is away on an important business meeting. Doughas asked the secretary to block any visitors or calls forthe duration of the meeting. The blinds in the room aredrawn, hiding the view of Walnut Street below. In situationsdemanding serious thinking, Doug likes to focuson the “internal world,” as he is fond of saying.Because of reduced home construction business, All-Weather is facing its first quarter of losses year-to-year.Sales are especially bad for the New Construction aluminumwindows that are manufactured at All-Weather’splant in Long Prairies, Minnesota. The ongoing productioncosts at the plant are no longer sustainable becauseof the nearly 80% reduction in the demand for New Constructionwindows. Estimates indicate that the plant hasbeen losing money at the rate of half a million dollarsevery month.The plant is run by a manufacturing manager, 3 shiftengineers, and 20 operators. Doug and his team havecompleted a detailed evaluation of these employees,and their conclusion is that only one of them deservesto be relocated to All-Weather’s other plants. Thisemployee, an operator, was one of the earliest to jointhe company. He was moved to Long Prairies, Minnesota,only a year ago and has also been a whistle-blowerregarding the dereliction of quality and safety normsin the plant.The manufacturing manager and the 3 shift engineers,along with the other 19 operators, have addedto the adverse effects of an already declining demandby producing products that are below All-Weather’squality standards. This deterioration in quality hasnot gone unnoticed; local consumer protection agenciesand builders associations have protested againstthe plant’s manufacturing practices. However, the 23employees in question have been with All-Weather foran average of five years, making the task of firing themdifficult.“How do we go about doing this?” Doug asks, wringinghis hands. “That it’s not a three- or four-figure layoffdoes not make it any easier.”“We’ll have to talk to them first,” Caleb says, checkingthe calendar on his Blackberry, “before we send them alayoff notice.”“See that we follow the WARN Act in all respects,”Doug says, referring to the Worker Adjustment andRetraining Notification (WARN) Act,* 1989, which stipulatesgiving an advance notice of two months before layingoff employees.The next day, Caleb and Tanner drive to the LongPrairies plant. They hold a meeting of all the employeesand break the news. The manufacturing manager walksout. The three engineers remain in the room but do nothingto help Caleb as he faces angry questions and accusationsfrom the operators. Caleb has not yet told the oneoperator, whom Doug and he have decided to relocate,the news that he wouldn’t be losing his job; however,this operator too joins the other 19 in demanding toknow why a company like All-Weather cannot protectthese jobs regardless of the state of the economy. Caleblistens to everyone and promises to get back after furtherdeliberations.Back in the headquarters, Doug, Caleb, and Tanner sitdown again. Doug has also spoken with the VP of Manufacturingin the meanwhile. “Gentlemen, how do youthink we should proceed?” Doug asks, this time in a more*The information about the WARN Act is taken from http://www.doleta.gov/programs/factsht/warn.htm.determined voice, knowing that he has to go throughwith this no matter how unpleasant the task. The costsof running the plant are substantial and cannot be toleratedin view of the first-ever quarterly loss All-Weatherhas suffered. Besides, Doug does not want to set a badprecedent by relocating these 23 employees despite theirpoor performance which has cost the company dearly.“Let us issue them the notice without further delay,”Tanner says, looking at Caleb.“No. I think we owe them one more meeting,” Calebsays, quietly. “This time here in the headquarters.”“But Caleb we can’t—,” Tanner begins to say but iswaved off by Doug.“Caleb is right,” Doug says, standing up, “but it’s arisk because they may not be satisfied with the secondmeeting.”“I believe it’s a risk we must take,” Caleb says, walkingup to the flip chart in the room and writing on it thefollowing: Issue the notice first, then have the meeting. “Ithink what we need to do,” he begins to explain, “is firstto communicate clearly to them that they will lose theirjobs, then offer to help.”“Sounds like the path of least resistance,” Doug says.Caleb asks Tanner to draft the layoff notice, a memoon All-Weather’s letterhead that will be signed by Doug.Here is the draft that Tanner has prepared to show Caleb,though he has a feeling that the draft needs improvementand that he may have to revisit it before Caleb reads it:To: All Employees, Long Prairies Plant, MNFrom: VP (HR)Subject: LayoffsDate: April 15, 2010As was discussed during our recent visit to your plant, we are forced to close yourplant immediately due to continuing heavy losses. Consequently, your job with thecompany will end on June 30, 2010. The only exception will be Mr. J. L. Broder, whowill be transferred to a suitable plant within the company. We’re making this exceptionbecause he was among the first to join the company and has taken steps to voicehis concerns with your plant even though he only recently joined your team. In otherwords, we believe we cannot fault him for what has happened, which we believe waslargely the doing of all the others of you who work in the plant.Your plant has cost the company nearly $3.5 million. We can no longer sustainthese kinds of losses in view of the sagging economy and our first-ever recordedloss in the first quarter. The product your plant makes is also no longer in demand; itsdemand has declined by as much as 80%. We don’t know for sure when the demandwill rise again. Even if it reaches its old levels some day, we cannot in those hopesalone carry on the burden of a loss-making plant for an indefinite period of time.Sorry, but the fittest survive in this or any other industry.To make your departure as easy as possible on you and your families, we inviteyou for a personal meeting and counseling to the HR Department at headquarters.Both the VP of HR and the VP of Manufacturing will talk to you in spite of their verybusy schedules. You can also ask them for any help you need, though we cannotpromise anything. Once again, we’re sorry that you have to leave, but we hope wewill part company without much fuss. Have a great day.Based on of your reading of chapter 15, analyzeTanner’s draft. To help with your analysis, refer tothe checklist for negative messages included at theend of the chapter. Does the draft effectively addressa negative situation such as a layoff? Does it strike theright tone with its audience of upset employees? Basedon your analysis of the draft, work in groups to reviseTanner’s draft .