I am not sure how many articles I have read over the past months talking about the greed of the CEO and executive leadership even amongst the constant layoffs that our nation is experiencing. In my reading of some of the other blogs, there was a discussion surrounding if there was a suitable alternative to layoffs. I gave some thoughts however did not have a real practical or example of a company that has implemented cost cutting in the face of layoffs to reverse the trend. One has surfaced.
Kevin Cullen from The Boston Globe writes about Paul Levy, the CEO of the Beth Israel Deaconess Medical Center and what they did in the face of layoffs. Paul was faced with huge budget shortfalls and the pressure to make the numbers meet the targets. With that, layoffs were proposed to the extent of removing more than 600 jobs. Faced with a huge challenge, Paul did not play it safe but enlisted his most trusted and secure asset - his people. All of them to be exact. He went before the entire staff and told them this is where they are and what needed to be done to ensure financial health for the company.
People were more than enthusiastic and looked for increasing ways to reduce costs without costing people their jobs. With the meeting, the offers for cost cutting was coming by the hundreds. By the time it was all said and done, there were layoffs but reduced from 600 down to 150. Look at some of the suggestions offered:
Reduce the work week from 5 days down to 4
No raises for the next 2 yrs
Reduce company expense accounts
Executive mgmt pay cuts
Remove fringe benefits
It appears that there are suitable options to simply just layoffs. With the economic situation consistantly changing and having global implications, the simple approach of just letting people go does not address how the world of business is changing. With increased pressure to reduce costs, companies will need to enlist the assistance of the people rather than turning a deaf ear to them and just letting them go.
Written by Jason Monastra