The Layoff Essay Example
The Layoff Essay Example

The Layoff Essay Example

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  • Pages: 4 (949 words)
  • Published: April 12, 2017
  • Type: Case Study
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Case Study The Layoff Robin Astrigo, CEO of Astrigo Holdings, has recently discovered that his business is beginning to suffer financially. Profits are significantly decreasing despite company promotions, inventory cuts, and expense adjustments. In addition, Astrigo Holdings is losing sales to other competitive retailers with more reasonably priced products. The business needs to make a change in order to pick itself up from this recession. Mr. Astrigo has come to the conclusion that multiple layoffs must take place within the company in order to compensate for financial losses.

By presenting company layoffs, Astrigo Holdings will be able to compete with other retailers and focus on other areas such as customer service. Layoffs are not necessarily what Mr. Astrigo wants to do, but rather something he must do to prevent further financial loss. Some difficulties are associ


ated with ridding the company of present employees. Company layoffs result in a low morale for existing employees, customers, and investors. This could mean terrible things for the business. If customers see that Astrigo Holdings is suffering, customers may take their business elsewhere.

Moreover, layoffs put a great strain on those families affected while costing the company money in severance pay. After weighing his options, Mr. Astrigo must prepare a strategy to improve company finances by way of company layoffs or he must take an alternative route to cut company costs. Mr. Astrigo has two courses of action he can follow in order to improve the financial stability of Astrigo Holdings. The first plan involves a ten percent company layoff based on the lowest percent of performance appraisals. Lisa Warren, a top employee at the company, proposed this plan to another employe

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at Astrigo Holdings, Morris Meyers.

Performance appraisals are a great source to use when deciding who should stay and who should go in a business setting. If these evaluations were given correctly originally, then this process would quickly and easily eliminate the weakest employees at Astrigo Holdings. Also, if there is a decrease in employment, job rotation would need to be addressed. Because of the employment shortage, existing employees must understand multiple aspects of the business in order to ensure that every element of the business is under effective management. Although it is a quick and easy process, performance evaluations are not always accurate.

Management tends to perform evaluations with criticism and no employee appreciation. The inaccuracy of employee appraisals remains a weakness of this alternative plan. Performance appraisals could be improved if problem solving and goal setting are addressed as well as a systematic follow up led by management. As stated earlier, layoffs also lead to an overall decrease in company morale. When employees are dismissed from employment, it leaves a sense of insecurity to the remaining employees which then leads to a decrease in production levels.

The second course of action involves a stronger loyalty to the employees at Astrigo Holdings. Sushil Bhatia, Vice President of Marketing and Strategy, suggests to Mr. Astrigo that a company layoff is not necessary to improve the company’s minor recession. He simply suggests a five percent pay cut across the board to decrease overall costs. He also mentions that many employees see no need for multiple layoffs because Mr. Astrigo keeps a great amount of money in the bank in case of any company acquisitions. Employees argue that a large

bank account does not justify eliminating present employees.

A pay cut would benefit the company because although employees would receive a lower income, employees would not be jobless. Employees would also appreciate Mr. Astrigo’s consideration in keeping his staff employed and morale would be at a higher level. When all is said and done, the idea of an overall company pay cut is very risky. Although employees have jobs, there is no guarantee that every employee will accept the pay cut. Some employees may quit or seek other job opportunities with higher pay. Furthermore, the pay cut may not be enough to compensate for the company’s complete financial loss.

Mr. Astrigo must keep in mind that what is right for the company is not always right for the employee. Ultimately it is impossible to keep employees, customers, and investors happy all at the same in this specific situation. After weighing both options, Mr. Astrigo needs to eliminate employees based on their previous performance appraisals. A company layoff will present less risk than an overall pay cut and the company does not need any element of risk present in such a financial crisis. Mr. Astrigo must do what is best for the company over what is best for the employee.

Because performance appraisals are not always one hundred percent accurate, he must take a considerable amount of time in evaluating employees before eliminating them. In order to get the most accurate evaluations, Mr. Astrigo could meet with each employee that could potentially be eliminated from Astrigo Holdings. This process may take time, but overall it will benefit the company by ridding the weaker employees. Lastly, the decision to eliminate

weak employees will result in a greater performance required of the existing employees.

The remaining staff must focus on the company goal which is to take care of the customer. In order to keep the title of the world’s best customer service, employees must work harder to keep customers coming to their retail shops. Since employee numbers are down, staff must go above and beyond to engage customer interaction. In conclusion, time will be an element involved in improving the future success of Astrigo Holdings. Making more time to improve customer interaction will help keep the business a competitive market with other retailers so long as the customer service needs are met!

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