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Management 306

Layoffs

You are the Senior Vice-President (SVP) of Human Resources for a financial software company that has 7,500 employees. In the past, the company has focused on selling a software product, AccountSoft, to large accounting firms. However, AccountSoft has suffered declining sales for the past two years, and management has decided to change the focus of the company to sell to small businesses and individuals. Because AccountSoft no longer fits with the new mission of the company, it will be sold to another financial software company—Accounting Support Services, Inc. (ASS).

The sale of AccountSoft to Accounting Support Services will affect two groups of employees in the AccountSoft division. Software developers will transfer to the acquiring firm, but the sales and marketing staff (about 150 people) will be leaving. This was the agreement with Accounting Support Services as part of the acquisition deal.

To announce the change in company mission, the sale of AccountSoft, and the upcoming layoffs, you advise the CEO to send an email to all employees. You are tasked with writing the email that will be sent. In addition, you will have individual conversations with employees who will be affected by the layoffs.

Write the memo to communicate the decision clearly and help employees understand and accept the change.

Audience

Though you are writing to all 7,500 employees, the sale of AccountSoft will not affect everyone the same. Two percent of all employees will be laid off and an unknown number will be transferred to Accounting Support Services. The remainder will remain with the company, but will need to understand how the change will affect their jobs.

Purpose

Your purpose is to communicate the decision, the facts that led up to the decision, the employees who will be affected by the decision, and future company plans to all remaining employees. Be sure to include specific dates when the changes will occur.

Structure

Structure the "bad news" indirectly. Include at least four paragraphs. The first paragraph will be the context or buffer, the second will be the explanation, the third will contain the bad news, and the fourth will contain the goodwill close.

Style

When conveying bad news, tone is important. Choose a style that is clear and informative, positive and respectful. Consider the reaction to your choice of words conveying the bad news. For example, imagine the difference between saying "unfortunately, valuable employees will be laid off" versus "excess employees will be dumped."

Management 306

Layoffs (Example 1)

MISYS FINANCIAL SOFTWARE

To: Employees of Financial Software Systems From: Diego Morales, CEO Date: October 27, 2016 Subject: Corporate Downsizing

Throughout the last few years, our global economy has encountered a number of great depressions and recently, the software industry has been the victim. As you all may know, we as a company have done everything in our power to maintain net earnings at a maximum as best as possible. However with a warm heart, I am sadden to inform you that that hasn't been the case lately. Before I state the company's future strategic business plan I would like to thank the people who have kept this company alive.

First and foremost, I would like to thank each and every one of you for the hard work and dedication you have accomplished over the years. Out of all the 7,500 employees in this division, I can honestly say that I wouldn't want any other group of individuals to manage besides you. Not only am I proud of each and every one of you but you have all contributed to produce one of the top selling software products out on the market.

However, over several talks with the board of directors and production managers we have all decided to sell our product AccountSoft to an interested firm, Account Support Services. As well as each and every one of you, I am also very upset with this circumstance. I truly understand that AccountSoft is one of our major products but recently, it hasn't been making sufficient satisfaction to our company's specific mission. Not to mention that keeping this product under our production will result in an even greater loss in the near future. Therefore for the sake of the company's future, a decision had to be made.

As part of this acquisition deal with Account Support Services, we have agreed that the software developers will also go to the acquiring firm. However, the sales and marketing team will not and therefore be leaving our company as well. It deeply hurts me to say that approximately 150 employees will be laid off. In the upcoming days, any one is welcomed to meet and consult with the Senior Vice President of the HR Department for further details or discuss more personal matters.

On the other hand, we have taken into consideration each and everyone's circumstance and even though the acquisition will not be finalized for another four months, we have decided to prepare you for the future. During these four months, the company will offer free workshops. Certain hiring events will be held in the warehouse as well as resume workshops for anyone who seeks employment in a different field. The company will also offer a counselor for personal help and guidance and all these services will be offered at your convenience.

Now, as CEO I honestly understand how dreadful hearing bad news can be since I too have been laid off in my career. Therefore, I have managed to incorporate a perk for all those years you have all given for this company. As I said earlier, we couldn't have gotten this far without any of you so consider this it as a "Thank you" in return. Now when the acquisition finalizes on February 24, all employees who are laid off will remain on our pay roll for another month. No further labor will be required after February 24, 2017 but each employee will still receive income.

With a deep heart, I understand that is not nearly enough to show you all how grateful I am but during these hard financial times, it's the best I can do. A rigid choice has led our company to relinquish a great select group of individuals and in the upcoming path, I your CEO will make sure the necessary tools and help is provided to facilitate every need. We all here at MISYS gladly appreciate your cooperation and understanding with our distance. Last thing to do is to consider this a setback, but rather instead a new beginning. Any further questions or regards are highly welcomed and the HR Department is also available to serve you. We are here for you and with you until the end.

Layoffs (Example 2)

FSE

To: Employees of Financial Software Engineering FSE From: Aguilar, Ozzy CEO Date: November 1, 2016 Subject: FSE Upcoming Changes

I personally, as your CEO, would like to thank each and everyone of you that has contribute to our company's success. If it wasn't because you all have demonstrated dedication at 110%, this company, your company would not be in the position it has been for many years now. As you all know the market has been taken a toll for the past two years in our AccountSoft departments, therefore our company is forced to make some changes that will affect about 2% of us which is around 150 of our employees. In contrast I will also like to extend a few services for those affected.

What Will Change

After two years of declining profits and with the possibility of losing more that what we have invested, the company has decided to sell the AccountSoft department. The selling process will take about four weeks to complete this which will create a reduction in staff. We regret the change, but with a company of 7500 employees this change is the only way to keep the company going for more years to come. By losing 2% of our company employees we can retain the remaining 98% under employment.

Who Is Affected

As 98% of employees will continue to sell and develop software the 2% of the employees currently assigned to the sells and marketing of AccountSoft department will be changed to different positions, departments, or careers. We are doing our best so that the change does not affect more than the 2% target that we are forced to change which is around 150 employees at the moment.

What The Company Is Doing For Yon

The company is working with the new buyers so that they can employ most of the 150 employees affected with this change. They have agreed to employ the software developers as part of the first terms in the contract agreement of the sell. We are also working internally with our Human Resource Department to see how many of the affected we can still accommodate around the company, keep in mind that this will develop pay cuts or a change in position. Management has agreed to take a 7% pay cut to alleviate some of the companies downsizing.

After The Changes

There are a few things that will happen after the sell. The company will use the 7% pay cut from management to put together a resume workshop for those affected. Also, the sick leave policy states that when an employee either quits or gets laid off he/she is entitled to 50% of the time accrued in their sick leave account. This will also change for those affected with the sell of the AccountSoft department, for this time only the company has agreed to pay 100% of the sick leave accrued to the 2% affected. The last thing we will encourage you is to file for unemployment, this for the most part is out of the companies' hands, but we are making sure that the affected know their remaining resources after the sell. I am also willing to personally write a letter of recommendation to those affected upon request.

Once again I would like to thank you for all your support throughout the years. I have enjoyed working with you all and I regret the change we are force to do. I will conduct two meetings on Friday, November 4. Please, prior to our meeting get together with your direct supervisors and discuss any issues you would like to bring before me. The first meeting will be held with the AccountSoft Sales department at 0900 hours, an hour after the department comes in to work and the second meeting will be held with the AccountSoft marketing department at 1300 hours, an hour after the department has return from lunch. At this times I will try and answer all your questions and also take in to consideration any other possible ideas that can help us all. Thank you and I look forward to our discussion.

Layoffs (Example 3)

Financial Software Systems

To: Employees of Financial Software Systems From: Lewis Renwick, CEO Date: November 6, 2014 Subject: Corporate Realignment of Goals, Objectives, and Downsizing

I wanted you to hear directly from me about our plans at Financial Software Systems. In recent days, rumors have been circulating throughout the organization and I would like to clarify some things. I know that the hard work and dedication of every employee throughout the entire organization is the key to Financial Software Systems success. I have had the pleasure to work alongside some of the most extraordinary individuals, and our focus has always been to provide the unprecedented superior financial software systems for large companies.

Since I became CEO, I've been working with Financial Software Systems' senior management team to create a plan to position the company for future growth, maintaining our position as the industry's leader in quality financial software systems鈥攁ll while safeguarding our traditions and legacy. The company is restructuring our goals and objectives to give ourselves the opportunity to compete in our core business; we will transition our focus from financial software systems for large to small companies. Financial Software Systems' prized gem, AccountSoft, has suffered declining sales over the past two years, and it no longer fits with the new goals and objectives of the company. As a result, the AccountSoft division of our company will be acquired by Accounting Support Services, Inc. to reduce costs and reallocate resources to our high-growth financial software systems that accomplish our goals.

Here at Financial Software Systems, we are currently in a position of unparalleled strength. To maintain this position, we are constantly reviewing our business to make sure we're operating as efficiently and effectively as possible. During this acquisition, we did our best to minimize staff reductions. However, and it pains me to say this, positions will be eliminated. As part of this effort, the 150 employees within the sales and marketing departments of AccountSoft will be laid off. Due to a stipulation in our acquisition agreement, the software developers of AccountSoft will be offered the same position within Accounting Support Services, Inc.; the organizational restructuring will take effect December 1, 2014.

To minimize the stress to our valued employees, we will be offering a free "Resume and Cover Letter Revising" workshop on November 20, 2014 for all individuals who wish to attend. A severance package of $2,000 per employee will be offered to financially relieve some of the burden caused upon each individual. Effective November 7, 2014, Employees in the sales and marketing departments of AccountSoft will remain on payroll until after the transition, but are no longer obligated to be present at the facility. We treat all of our employees with dignity and respect, and will provide the resources previously discussed to help them through this transition. Despite the challenges we face, we need to focus on the tasks at hand, maintain the sense of excellence that has defined our company for more than 50 years, and move forward knowing that, regardless of any organizational changes, we will remain the industry's gold standard.

Layoffs (Example 4)

MY SOFTWARE SYSTEMS

To: My Software System Associates From: Jessica La Madrid, CEO Date: November 1, 2016 Subject: Company Mission Changes

First and foremost, I want to thank each and every associate at My Software Systems, you have been an essential part of this company and without your hard-work and dedication, our business would not be where it is at today. I have had the pleasure of working along-side some of our most extraordinary employees in the company and our focus has always been to offer success. As you know, we have been trying our best to steer through the downturn that has affected our economy and our business. With that, our company will be going through some changes.

For the past two years, we have been experiencing declining sales at My Software Systems due to AccountSoft software. This software no longer fits with the changes that our company will be going through. As a result, AccountSoft will be acquired by Accounting Support Services Inc. to reduce costs and alter resources to our financial software systems.

Unfortunately, we had been hoping that during this difficult period of new changes we could keep all of our employees. However, this is not the case. For those who are working within the sales and marketing department you will be laid off. It is my regret, that we must inform you that we will be unable to utilize your services after December 1, 2016. Here at My Software Systems, we have been pleased with the qualities you have exhibited during your employment, and we will be sorry to lose you as an employee of the company. We will be offering you Bea Insurance, a severance package and unemployed benefits during this difficult transition time.

Later today, My Software Systems will be having an open conference in the Core Auditorium at 5:00pm to answer all and any questions that you may have. We will also be discussing in detail the next few changes that our company will have.

If your question was not answered or if you need time for personal reasons, please set up and individual meeting at the Human Resource Department or call 909-555-5555.

Here at My Software Systems, please accept our best wishes for your future.