Economic tailspin forces organizations to explain to laid-off employees that what’s bad for them is best for the company

On the TV show “The Apprentice,” Donald Trump seemed to relish announcing, “You’re fired” to losing contestants. But most employers recoil from having to tell employees that they will be “downsized.” To make a difficult job easier, managers sometimes use euphemisms and jargon to avoid bluntly announcing that someone has been laid off. In fact, cutbacks have generated new words like “rightsizing” and “re-engineering.”

Regardless of the language, an economic tailspin forces organizations to explain to laid-off employees that what’s bad for them is best for the company. At eBay, 1,500 employees lost their jobs in a program of “employee simplification.” At Yahoo the CEO explained layoffs as a way for the company to “become more fit.”

No matter how you look at it, people are worried about losing their jobs, and those who remain are worried about whether the company will stay in business.

Experts differ on how to reveal possible workforce reductions. Should managers disclose the news indirectly and quietly? Or should they use the direct approach and announce loudly that they are taking forceful action to strengthen the organization in a dour economy? Some say that executives should use bland language to minimize the public relations fallout from mass firings. Vague explanations and even corporate jargon may be appropriate to reduce the negative effect on remaining employees and on recruiting new employees when the economy rebounds. Opaque language and euphemisms may lessen the impact of layoffs.

Part 1:

Your company has decided to lay off 10 percent of its workforce to maintain profitability. Although every department has participated in cost-cutting measures, expenses continue to mount, and sales are not where they should be. Your direct supervisor, Shirley Schmidt, has asked you to draft an email that goes to the staff whose jobs are untouched by the layoffs. The goal is to assure key employees that management is in control of the situation. You need to emphasize that your company maintains a strong strategic vision, and that management is convinced of the firm’s rosy future in the tech industry. Still, layoffs are necessary to make the company more financially stable. Ever mindful of its people, your company is taking all possible measures to assist those who have lost their jobs. These reductions will help make the firm stronger, says Schmidt.

In addressing remaining employees, your message should explain the bad news and strive to preserve employee morale. Decide whether to use the direct or indirect approach. Apply as many concepts as possible from the readings. After you’ve written the letter, write an essay describing how you used the ideas from the readings.

Part 2:

One part of your company’s business (again, the same company in the Case Assignments 1 and 2) is website design and hosting services. Your company values its clients and understands that the recession has affected everyone. But lately you’ve realized that some clients are sapping your business’s already stretched resources. One of your first patrons—Minnie MacElroy of Minnie’s Miniscule Miniatures—has been a demanding client from the get-go. She asked for changes to the site design she had already approved, forcing you to put in more hours than your quote covered. Once the site went live, Minnie consistently badgered you to make other changes so often that you did them without charge just to get her off your back. When payment of her monthly hosting fee started becoming erratic, you agreed to let her slide until her business picked up. But now she’s six months delinquent.

Despite repeated phone calls and several letters asking her to make a payment, you have received nothing. As a business owner, you understand how difficult it is to keep your doors open. You have had to lay off your best Web designer and are now doing your own bookkeeping instead of paying for that service. The contract MacElroy signed has a provision that if an account remains unpaid, your company may opt to render the site nonfunctional. The contract also states that your company retains the copyright on the design of any site it has created. While you are hesitant to lose any business in this economic climate, you have decided that some clients are more trouble than they are worth, and that if MacElroy doesn’t begin paying the money she owes you, you will exercise your option of closing her site.

Write a letter informing Minnie that you are closing down her site if she does not pay the money she owes you. Should you fully explain that she has been a difficult customer, or should you rely on her lack of payment as your reason for threatening to break the contract?

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