I Just Helped Lay-Off 140 People.

The Dog wants to start this by saying that he is not looking for any sympathy on this issue. He is only writing this to get it out of his head and maybe shed some light on the other side of employee layoffs. Sympathy, if there is any, should be reserved for the 140 workers and their families that started the day with jobs, and ended it without them.  

As some of you may know the Dog works for a Heavy Equipment Dealership. We are a pretty big and spread out company covering 2 and 2/10 States in the West. Our business is to sell, rent and service heavy equipment. Most of the company is focused on the shops where we maintain and repair the components and machines of our customers. To be successful as a heavy equipment business you have to have multiple locations near places where the equipment is being used. This means that you have to have shops, parts, tooling, technicians, clerks and front offices in many locations.

When the economy is booming it is a great business as we sell and service the machines that build everything. The flip side is when the economy shuts down, so do the projects that keep our customers afloat and us as well. We knew going into the end of last year that things were going to be very bad for at least the first two quarters of this year and perhaps the whole year. In early December the Dog was given a project, what can we do to avoid laying off anyone (the good part) and if we have to lay off people what are the triggers and what is the plan.

To say that this project sucked is a total understatement. It was a requirement that it be done totally on under the radar, no discussing with anyone other than the executives and the people on the project, full stop. The first thing the Dog’s team came up with was a salary freeze for everyone even vaguely considered management. This would help, but it was not enough. So we limited the salary increase for all workers to 2%. We have a culture where we give a raise every year so we did not feel we could eliminate it totally, but since it seemed that inflation would not be a problem this year, we kept it as low as we could.

By the end of January, we knew that our projections for how much we our business would be down this year from last year was way off, as in more than a 1/3. There was no getting around it; we were staring layoffs in the face. Our company is a family owned one and our owners for all that they are dyed-in-the-wool Conservatives they also have this enormous sense of responsibility to their employees. We had a layoff plan in place in late February, but the President of the company wanted to wait (even though it would mean literally millions of dollars of losses) to see if we could hold our breath until the stimulus package money started to filter into the States and start up infrastructure projects.

Sadly this did not happen. Sales fell off a cliff, work the shops was just not there. In mid-March the team was brought together to start deciding on who would be let go and who would stay. If you have never done this, it is one of the most wrenching things you can do, or so the Dog thought until today.

One of our first principles was that we could not just go after the technicians in the shops. It seems obvious that when these men and women are not turning wrenches they are a cost, not a benefit. The balancing issue is when you let a technician go, you nearly never get them back. When the economy goes back up, there is plenty of work for trained diesel and heavy equipment technicians.  There is also the need to be ready to be the preferred provider when the stimulus money does start to affect the heavy equipment business, and one of the prime requirements is having enough technicians in enough places to be able to do the work.

So the decision was made to look at every department in the company. With our level of work down so drastically there was excess capacity in all of the areas, not just the shops. Now we were tasked with deciding what metrics to put on this decision. The average length of service with our company is 17 years, so the usual metric of last in, first out was not going to fit. We put together productivity metrics and what was called the “Naughty and Nice list”. The Dog knows that when things are tough some people develop callus humor (nurses do this a lot) but that particular name nearly had the old hound coming to blows with the person that coined it and relentlessly used it.

In any case it was a way to look for those that were strong resisters to change, those who consistently had attendance or performance problems. We also looked at the process paths to see where there would be less work even when things picked up. We put metrics on the capacity of each department and area and then compared that to the expected work flow. Once all the metrics were in, it left us with a list of people that were in the words of those in the UK “redundant”.

The next step was the severance packages. The President and the Execs wanted to be as generous as we could, so we used ¼ of the expected savings on severance. The fairest way we could do this was to provide a week of pay for every year worked at the company. We would also pay any unused vacation days at the time we gave them their last checks. In our industry insurance is a huge thing, as technicians deal with some pretty dangerous situation on a regular basis. We decided that we would cover the cost of the COBRA insurance for all laid-off workers for two months and provide a 30% subsidy for the following 10. We would have liked to do more, but the cost of insurance is so high that it was not practical.

This brings us up to this morning and the actual laying off of the people that made it on that list. There are a lot, so the HR director asked for help from the team. We did not have to do anything the HR folks handled it, we just had to be there as our policy is to have two people present when we terminate (what a sanitized word for fire) workers. The Dog could have gotten out of it, he was just the project leader, but the Dog believes that when you are going to affect people’s lives like this, you have a responsibility to see it, anything else is moral cowardice.

It was as horrible as you might expect; some folks (less than you might think) cried, some were angry and let is show, but most were pretty quite and shell shocked. You could tell that their minds were going 5000 rpm, but nothing was engaged, just the wheels spinning around and around and around. It ran the gamut from people who had been with the company a few weeks to those that had been with us for more than two decades. The HR folks were great, compassionate, willing to listen, willing to hear what was said, even if the outcome was not going to change at all.

In the end my company laid-off 140 people or ten percent of our workforce. It was all done by noon, at least the laying-off, the effects on moral is going to be longer than that. You know, some of us want to move up that pyramid in the corporate world, take on more responsibility, be the ones that steer the ship of our company forward, but the cost of this having to look someone with a family to support, kids to send to college, a house to pay in the eyes and tell them that they no longer have a job. It is a really freaking high cost.

Over the last three months and today, the Dog did what he knew was required for his company. The team fought like hell to keep the numbers down, we looked for whatever hare-brained scheme we could to avoid cutting jobs, but in the end we came up short. We failed and because of that, 140 families are facing uncertainty tonight. The Dog would love to say he had the courage to put his name up for one of the cuts, but the sad fact is he never did. Being on the team meant that for sure, the Dog would keep his job, even as he cut other peoples. What that makes the Dog he can’t say.

The floor is your, the Dog is going to go drink a quart of Margaritas.