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To lay off or not to lay off – that is the question! - Apart from salaries and the other ones already dealt with, there’s R&D, rental and IT

“You are a hard task master; can we employ you to implement all this tough stuff?” Mary retorted. “Okay, what’s next? You know we have cut back on entertainment but I haven’t monitored it closely because I was concerned that bona fide marketing and sales lunches with clients would be lost. The management accounts would suggest that nobody has done anything in this regard. So, another option is for me to cut back in this area but put some parameters in place so that we continue with bona fide marketing and sales lunches subject to certain conditions that optimise their potential effectiveness and ensure that relationships continue to be built or, at the very least, are not lost.”

“So far we have lay offs, flights and entertainment. We need at least another three. What are your largest expenditure items?”

“Apart from salaries and the other ones already dealt with, there’s R&D, rental and IT. As far as R&D is concerned, we have already cut back to the absolutely essential projects. We have also discussed the properties many times over the years and I satisfied that we have done all we can here…”

“Will there be space once the lay-offs have been implemented?”

“Oh yes, I guess there will be quite a lot of space. My FD has estimated that if we lay off it will be as much as 10% of the people so that logically we may be able to free up about 10% of the space too for sub-letting. It may be less, if we are able to use these other cost-cutting options significantly.”

“What can you cut in IT?”

“Offhand I am not sure. The division just seems to have mushroomed over the last five years. But I am not close enough to it yet to be able to come up with any possibilities here?”

“I would like to stay with this for a moment – are you okay with that? If you are not close enough to it, then who is?”

“Perumal Naidoo heads it up and is an extremely competent guy. I guess I could ask him to look at it and come back to me?”

“What would look at it look like?”

“Actually, now that I think about it, we are very project focused in the organisation and we could ask him to set up a project team to investigate and come back with a proposal on how they could save x% - or perhaps they could come up with the percentage and the means to achieve it (excluding the company-wide initiatives you and I come up with). Actually, I think I am getting on a roll – there is no reason why we can’t do the same thing in every division.”

“Who would you involve in these project teams?”

“Obviously their management teams. Oh! Maybe we should go wider than that? Perhaps we should take an inclusive approach so that everyone has the opportunity to provide solutions – after all, we provide ourselves in our culture of robust dialogue and I think we would come up with some really good stuff management could never dream of.”

“Anyone else?”

“Can’t think of anyone – I mean I have just included everyone! No, I haven’t, have I! The executive and me – should we be involved? What message would it give if we weren’t? Perhaps that we are in our ivory towers expecting the people to find ways to avoid execution! It is the most important thing that is happening in the business right now, so I suppose we should each take a division or two. It would give us an opportunity to ensure that the people are receiving the correct messages and information and that the whole process is forward and solution focused. It would also give me an opportunity to learn what happens in those areas like IT where I don’t have as good a handle as I would like.”

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