HAMDEN — How big is too big?
When Microsoft Corp. announced last month that it would slash thousands of jobs in order to become more efficient, it became clear that more is not necessarily better. Companies seeking to expand, particularly via mergers and acquisitions, should take note, says Julia Fullick, assistant professor of management at Quinnipiac University’s School of Business.
“Most of the time, with an acquisition, you can’t maintain the same [number] of employees,” says Fullick. “The interesting thing about Microsoft is that they have a history of not laying people off. That’s why it comes as such a shock.”
Microsoft announced in July that it plans to cut up to 18,000 jobs, or about 14 percent of its workforce, over the next 12 months. The announcement came after the company revealed plans last year to acquire Nokia Corp. The acquisition, which was finalized in April, created job overlap for a company that already was experiencing the downside of exponential growth.
But for companies that find themselves overstaffed, for whatever reasons, massive layoffs don’t have to be a foregone conclusion, according to Fullick.
“With small companies, you don’t necessarily have to lay people off. For example, there’s job-sharing,” Fullick notes. “Another alternative is a reduced work week. You can reduce an employee’s hours from 40 to 36, for instance. Just cutting those four hours out of the work week can make a significant impact.”
Also, says Fullick, sacrifices can be made on the management level to help a company maintain its workforce during tough times.
“Senior employees or top-level management can have pay freezes, or even take a pay cut,” she says.
A careful review of your organization’s expense side may also reveal alternatives to layoffs, says Fullick.
“Look at your records. They might show where you can actually cut costs.”
There also are ways to handle company transitions, such as an acquisition, that will support workers and their morale.
“Any time there’s a merger or acquisition, the socialization of employees is critical,” says Fullick. “Nokia employees that are now becoming Microsoft employees are coming from a completely different corporate culture.”
One way to help with such a transition is to establish a mentoring system, Fullick notes. For example, employees should be systematically guided through new company specifics of workplace commonalities such as e-mail and ID badges. And when elements of the merged company culture are introduced, it is a “good idea” to have representatives from both companies present them. That way employees can see that the new business entity is “strategically moving forward,” according to Fullick.
If large-scale layoffs are unavoidable, however, there are “best-practices” ways for businesses to handle them, Fullick says.
“It’s always best if a memo is sent out, and if possible, hold a ‘town hall’ meeting,” Fullick says. This should be done “as soon as possible. You don’t want your employees to find out from the media before they hear it from you.
“You want to make sure you’re open and honest with them,” she adds. “If you’re not sure, be honest and say, ‘I’m not sure.’”