Happy Holidays… You’re fired!


Last year for Catalog Success Magazine, I wrote a scathing attack on downsizing after reading about Lillian Vernon letting go of 100 employees a mere five days before Christmas.   And without any warning!  And not just seasonal employees either!

Could there be a more despicable act?

Now with our economy on the brink, massive layoffs are being, uh, for lack of a better term, executed. Unemployment is at 6.5%, and experts and pundits alike are predicting that 1st quarter of 2009, will be even worse.

Therefore, I republish the article here because it’s point is even more valid today than last year. In fact, I know plenty of people who have just lost their jobs, and I find this to be a fitting tribute to those who fell (or more appropriately were pushed) onto their swords at the worst possible time of year.

Here goes…

Now, I’m not against making a profit, but as a direct marketer and direct marketing consultant, I always seek ways to reduce costs rather than cutting staff — a last resort to me — to meet profit goals.  Was it really going to kill a multimillion-dollar enterprise’s profits to keep 100 employees, who probably busted their collective butts to help Vernon make its holiday sales numbers, just a few more weeks?

Somebody is waaay out of line here!  I know today we live in a pressure-cooker environment, doing business at light speed. Holiday season in retail and mail order, from September on, is intense.  But come on, give people a break here.  Did Vernon’s management really need to do this?

Many people already find the holiday season stressful, while traditionally it’s supposed to be the “most wonderful time of the year;” a paradox of the times we live in.  The last thing someone needs is the ax to fall on them during that time.

My solution to holiday downsizings…

There should be some sort of moratorium on firings the last two months of the year.  Let’s extend that out into the third week of January just to be safe.  Add that to our list of best practices.

Rant over!  Anybody think I could possibly be off base?  Let me know.

Speak to you next week. Got comments? Post them below!  In the mean time, here is another article I wrote on downsizing as the road more easily traveled,

Here is another called downsizing is for sissies

Jim Gilbert is president of Gilbert Direct Marketing Inc., a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can e-mail him at jimdirect@aol.com.

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16 Responses

  1. I’ve seen people laid off just before Christmas at other companies over the years. It’s horrible and probably one of the reasons I’ve become so jaded. I was raised to believe that most people are “good” people and that only a few a “bad” people, but the longer I’ve lived in the world I’ve begun to wonder whether it isn’t the other way around. I think there is a general lack of empathy, especially in the corporate climate. No, many simply do not stop to consider how much more compassionate it would be to wait two weeks to lay off employees … or maybe they do yet they simply don’t care. I don’t get it.

  2. Yes, I agree, it’s almost impossible to find situations where layoffs before the holidays were necessary. I think it comes down to one thing: values. What does the organization doing the layoffs value? Unfortunately, there is an assumption that doing what’s right for the shareholders in the short-term is the “right” thing–that this will be smiled upon by the “business gods.” Companies cannot adequately factor and therefore forget the long-term value they will generate by treating people right. We all know this is a tough time. But it doesn’t have to an inhumane time. Do the right thing–treat people well and perhaps the business gods will smile down on us all again when they see enough good behavior out here. Happy holidays to everyone.

  3. Do employers owe their employees a living? This is an age-old question, one that harkens back to Socialism vs. Entrepreneurship

    If the company is willing to sacrifice the intellectual capital, momentum, and morale by cutting loose employees, this is BY LAW (in most states) their right. Should the company go under to ensure that people have jobs? How long has it been since people have been fired? Maybe the people who were canned have already have 5 years to prove their worth, and the current economic climate is a convenient excuse to cast off those who have already given up trying to be useful and were simply milking the system.

    You don’t know enough, and *I* certainly don’t know enough about the situation various companies are in to judge anyone for their actions.

    Is it better for a company to keep barely afloat and then eventually shut down, but make sure all of the looters who work there keep a “job” until such time as the business crumbles under its own weight?

    This is why I quit running my own business with employees. I’m tired of people thinking I “owe” them something other than dollars for effort. Once I decide to stop spending the dollars, or they decide to stop expending the effort — the relationship is over.

  4. While it is wrong to do layoffs during the holidays, it is very common.

    http://money.cnn.com/2005/12/19/news/economy/jobs_holiday_layoffs/index.htm

    I think it has to do with budgeting (ie. they’d rather incur the costs in the current as opposed to next year).

  5. David, I think that a tie goes to the dealer here and the cards are marked.

    Sure many companies have dead wood employees. But before person one is ever let go it incumbent upon upper management to explore every alternative option to reduce costs. unfortunately, it’s easier to do what is “acceptable” in todays environment and downsize. I’ve heard reports of companies who don’t even need to downsizing – because they can. Here is another article I wrote on the subject: http://gilbertdirectmarketing.wordpress.com/2008/11/11/thegilbertdirectmarketingblog/

  6. I agree 100% with David Russell. I run a small marketing company and one of my customers has stopped paying their invoices and may very well declare bankruptcy. This after we ran a fairly large/expensive data append job.

    Money is money, and if we don’t keep enough in the bank we have nothing to pay our employees with. Explore alternatives to reduce costs? Sure: spending freeze, salary freeze, no bonuses, and no 401K matching. Am I missing something else?

  7. Jeff, are you missing something? I think your list just looks at the topline. For instance, if you were in the catalog industry you could follow these cost reduction principles: http://gilbertdirectmarketing.wordpress.com/2008/11/11/10-ways-to-reduce-costs-save-your-company-and-look-like-a-superstar/

    Tom Peters has this principle called “management by wandering around“. I guarantee you that if you look, you’ll find inefficiencies galore in your company.

    Another example, a company I recently visited was bleeding revenue from it’s website and call center through lack of conversion.

    Hope that helps.
    Jim

  8. Bottom line, top line, or middle line, we have to make more than we spend or we go out of business! While I may be missing something, it’s not all that apparent. I took a look at the cost reduction principals, but sadly none of them apply to us. Our costs are primarily: salaries/benefits, equipment, communication charges (phones, internet, etc.), our lease, and before I forget – taxes. No call centers, etc. Our website doesn’t cost anything but occasional maintenance when we change it. So I would not say we have inefficiencies galore.

    I think your suggestions are targeted more towards catalog companies. We make our money by licensing software and hosting marketing databases. And like any company, if a large customer goes bankrupt on us, we feel the pain.

  9. I found your site on Google and read a few of your other entires. Nice Stuff. I’m looking forward to reading more from you.

  10. David Russell,

    I think you’re absolutely right–you don’t “owe” your employees anything. And certainly there are situations where layoffs–even holiday layoffs–have to be made.

    But there’s something to be said for treating employees as well as you possibly can. And if you have to downsize, holding off until after the holidays is the decent thing to do if at all possible. After all, there’s nothing more important to the success of your business than getting the right kinds of people to be the “face” of your company to the world.

    Happy holidays and success.

  11. To katie and all commenters: Thanks for your comments.

    Here’s my question to you... if you need to downsize employees, why do it all at once? That would presume you had a bunch of unproductive people on your staff that needed to be let go, right?

    I know how hard it is to hire, and once a hiring decision is made it really is a crapshoot, but the goal of 90 day and yearly reviews is to weed out the worst and keep the best.

    Regards,
    Jim

  12. I fully agree with you, as a previous executive I never liked the immediate layoff solutions. These are short term fixes and over the long term they impact the organization with costs higher than any saving achieved. For instance the morale (even worst in the case of Christmas firings) and workload of people left, the cost of retraining and rehiring once the market picks up again. So I wander why companies haven’t explored a solution of a wide reduction or fluctation of salaries. It would allow you to keep the workers and avoid all the issues mentioned above and keep workers more focused. For simplicity imagine a company would present his newly hired and existing employees with a contract that says that if the business goes down instead of cutting 5 or 10% of the workforce it would reduce salaries of 3 to 8% and it would do the contrary once business picks up. The company would still be solid the loss to employees would be very limited and temporary and it would reinforce the team spirit.

  13. Here’s an article someone sent to me about a company that cares deeply about their employees…

    http://www.msnbc.msn.com/id/27958458/?GT1=43001

  14. We have had over 70,000 layoffs in Canada and the automotive industry here is especially getting the brunt of it. Will it take our auto industry to completely disappear before the government takes a big stand and finally cuts THEIR pay cheques? Either way, companies seem to jump on the layoff bandwagon without thinking of better ways to cut costs and it is only costing us taxpayers money in unemployment insurance. While a recession is upon us, have we not learned anything from the 1930′s or the 1980′s?

  15. I was laid off from my advertising copywriter job this year on the Tuesday before Thanksgiving at 4:00p.m. Not so bad for me because I at least had health insurance with my husband’s employer, but several people were left with less than 5 days (including the holiday and following long weekend) to find new coverage. I find it unacceptable that the ability to afford health care is tied to a job. What about the children of these people? Cobra you say? Yes, it was offered at a cost of $1000 a month. That’s the reality today. We need to fix our health insurance/health care system, now. America should not be lagging behind the rest of the world in this critical area.

  16. If the goal of the company is to operate as a tribe – (and I think that is the ideal) – holding off laying off is the way to go.

    Performance based employees are a different animal. Teammates (and particularly long term ones) in the trenches deserve the longest leash possible.

    The U.S. Healthcare model is broken born out of a well intentioned response to hiring freezes during WWII. I don’t think it can be patched up – it needs to be blown up.

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