December 2021, on a quite normal Wednesday morning, Better.com – the mortgage company’s CEO- Vishal Garg announced that he took the decision of laying off about 9% of the workforce at a Zoom meeting abruptly informing the more than 900 employees on the call they were being terminated just before the holidays.
“If you’re on this call, you are part of the unlucky group that is being laid off,” Garg said on the call “Your employment here is terminated effective immediately.”
He then said employees could expect an email from HR detailing benefits and severance.
“Having to conduct layoffs is gut-wrenching, especially this time of year,” CFO Kevin Ryan said in a statement to CNN Business*. “However a fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market.”
Garg cited market efficiency, performance, and productivity as the reason behind the firings. Fortune later reported Garg accused the employees of “stealing” from their colleagues and customers by being unproductive and only working two hours a day. “This is the second time in my career I’m doing this and I do not want to do this. The last time I did it, I cried,” Garg said on the call, which remained short and emotionless.*
*Source CNN Business 2021/12/05
After Garg fired their colleagues, the remaining employees reported that he held a companywide call about the layoffs and told them that their productivity would be closely watched.
In their email to employees, the company’s board called the events “very regrettable” and said that the company has contracted a third-party firm to do a “leadership and cultural assessment”.
In an apology posted to the company’s website, Garg said that he “failed to show the appropriate amount of respect and appreciation for the individuals who were affected”.
“I own the decision to do the layoffs,” Garg said. “But in communicating it, I blundered the execution. In doing so, I embarrassed you.”*
*Source The guardian news
I come from a generation where corporates used to reward their employees who serve the company for 5, 10, 15, 20, years. I personally had those awards as I worked for the same company for 27 years serving a multinational company. Normally the awards used to come with a nice fat paycheck and a lovely certificate of appreciation.
I have witnessed the first Reduction in Force “RIF” in 1996 when the company put an end to a group of middle management team members; branch managers, marketing, finance, sales managers, successful ones, and for me they are regarded as idols. I stopped and thought a lot about this incident, what happened, how did the company dare to let them go, not only letting them go and end their employment but also paying them to leave.
Discussing, observing, and getting inside information, I was told that they were RIFED because they were so stagnant for the next phase of the company life; We are talking ICT companies where the change is rapid and the coming years will have a lot of innovation and integration between the company products and the new internet and communication revolution; they cannot coop.
I learned how to stay on top of the new innovation, I have to get connected, learn always, read more, do my MBA, work hard to attend all training, and stay on top of the change. And I succeeded.
But then, wave after wave of RIFs started to happen, each wave new reasons, one for the new business model, one for a new sales approach. Until one time, there was a wave of layoffs, I did not find a reason and even did not find a pattern of the people being laid off. Some sales, some finance, some old, and some young people. Nothing ties those people together. I used to be so confident it will not hit me. I am one of the best sales, productive, resilient, innovative, customer-driven, and a good communicator inside and outside the organization, and the most important is, I will find another job immediately if they let me go.
Later I knew, it was only numbers! Just numbers of employees, payroll deduction, and cost-saving. Each crisis happens anywhere in the world, it starts with a layoff, it is the easiest and most rapid cost-effective cost reduction measure the management does.
So starting the Y2K bubble crisis, generations went to the workforce, live, and not only understands but also accept the layoffs, the thing is that it become more aggrieve and emotionless. Management doesn’t care.
In 2008 and after the financial crisis, which emerged to be great rescission, job losses worldwide accelerated drastically starting in September 2008 following the bankruptcy of Lehman Brothers in the USA. In the United States of America alone, almost 5 million jobs were lost in the first 7 months of the crisis.
11348 KM away from the USA where the crisis started and in UAE, Dubai, some employees going to their offices in the morning found that their access card is not working and it is not letting them in!
It was so normal for employees to leave their cars at the airport park, homes, furniture abandoned escaping from their loans, and fear of being locked in a foreign country.
The assumption is that the Arab countries would remain stable especially the oil-rich Gulf Cooperation Council (GCC) countries because of their massive financial reserves, and the resource-poor countries because of their limited linkages to the global economic system–in particular, the global financial markets. However, this assumption has proven to be false.
The COVID-19 pandemic caused millions of businesses to suspend their normal daily activities and stay at home. The widespread commitment to public safety, all measures which were taken by governments had a catastrophic impact on the economy and resulted in massive job losses.
As of late April 2020, more than 30 million Americans had filed for unemployment benefits—the most dramatic rise in claims ever recorded. Virtually all of the job gains made in the decade since the Great Recession were erased in a matter of weeks.
The worldwide impact of the COVID-19 on unemployment rates is massive, and more of the complications in world trade, reservations, containers, etc. are affecting the layoffs organizations do each day.
All three of these terms describe actions that are intended to achieve cost savings by reducing a company’s payroll costs. Even though the words have been used interchangeably, their true meanings are quite different.
FURLOUGH, A furlough is considered to be an alternative to layoff. When an employer furloughs its employees, it requires them to work fewer hours or to take a certain amount of unpaid time off.
LAYOFF, A layoff is a temporary separation from payroll. An employee is laid off because there is not enough work for him or her to perform. The employer, however, believes that this condition will change and intends to recall the person when work again becomes available.
REDUCTION IN FORCE, A reduction in force (RIF) occurs when a position is eliminated without the intention of replacing it and involves a permanent cut in headcount. A layoff may turn into a RIF, or the employer may choose to immediately reduce their workforce. A RIF can be accomplished by terminating employees or by means of attrition.
*Source SHRM Organization
A stable job terminology may not really exist in this disruptive market climate, the stability concept needs to change and new generations coming to the workforce need to understand how to cope with these circumstances and of course need to make sure they are ready for a disruptive termination of any form.
Pinnacle has a set of consultation programs, training, services to help your organization manage the change and the need to restructure your employment strategy before you take the hard actions that might regrettable. We help you plot the right human resources strategy, build watertight policies and procedures that control the workplace, the relationship, and the culture of your organization.
Pinnacle® is a multi-country consultancy firm. Our consultants are spread around the world. We have built our organization on a modern business model with agility, diversity, and resilience to the business dynamics. We have chosen our technology platform to support our modern mindset thus we work from anywhere …. As work is not a place anymore. We implement Lean Six Sigma in everything we do whether internally or externally at our client sites.
Article is written by:
Mohamed Mounir,
Managing Director
Pinnacle Ltd.
| Albania | Austria | Canada | Egypt | Germany | India | Jordan | Kosovo | Lebanon | Libya | Macedonia | Oman | Serbia | South Africa | Switzerland | United Arab Emirates
18 Hoda Shaarawy St. 4th Floor, Office 22, Downtown, Cairo, Egypt.
+20 (02) 2390 0425
© 2019 Pinnacle Ltd. All rights reserved. Terms and Conditions | Privacy Policy | Cookies Policy
