STYLE SHEET AND CASE STUDY ANALYSIS AND RECOMMEND

Problem Statement

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Due to our present nee to update manufacturing equipment and need to raise capital, it is necessary to reduce costs by terminating as many as two thousand salaried employees.  However, those who remain with Weymouth will enjoy new benefits such as salary increases and improved benefits.  The sensitive nature of the two issues requires a communication strategy that is clear, fair and consistent for both internal and external parties.  See recommendations below.

Facts

• Manufacturing equipment needs updating with an estimated project cost of 2 billion dollars per year.
• A reduction of 2,000 employees must take place to help raise capital.
• Up to 1000 positions may be eliminated due early retirement and transfers.
• Laid off employees will be offered a severance package to include the payout of unused and accrued vacation and insurance coverage for one month following termination.
• Weymouth will assist them in their job search.
• Retained employees will be given increased salaries and benefits to retain them.

Analysis/Discussion

Goal:  The goal of the communication strategy is to send a clear and consistent message to everyone using appropriate media, therefore eliminating rumors within the company, the pubic and the media.

SOLUTION #1:  First, a letter will be addressed to all employees announcing the upcoming terminations of salaried positions and increased benefits and salaries for retained employees. A formal letter from Mr. Weymouth is the most appropriate.  He will discuss the company’s need to streamline operations to raise capital to update equipment, and to stay in business. He will express our compassion for those losing their jobs. Second, layoffs will be conducted in groups in each department by a supervisor and manager.  A written notification that includes termination benefits will be given to each employee.  Finally, when the restructuring information has been communicated to all internal parties, a press release will be issued to the media, so the facts about the need for restructuring are available to the public.  Pros:  The reasons for the layoffs and restructuring plan will be communicated to everyone in the company at the same time. It is necessary to tell employees being retained about increased benefits and salaries, so we do not have key employees quit.  The information about raises and increased benefits will come to light anyway, and it is better to be transparent with the information.  The press release will announce publically our reasons and plans for restructuring the company. Cons:  With up to 2,000 employees being terminated, it will be a time consuming and emotional task for supervisors and managers. Terminated employees will be upset that their jobs were eliminated, while others were given increased salaries and benefits. Waiting to release the information publically by press release may still lead to rumors and speculation about the restructuring.

SOLUTION #2.  Incorporate the first two steps as above, but wait to share the news concerning salary increases and improved benefits until after layoffs are completed.  Increases will be announced through routine channels such as personnel bulletins or in the company newsletters The Open Hearth and Metal News.  Pros:  The bulletins and newsletters are efficient and cost effective ways to communicate routine benefit information.  Waiting to release the information may help to avoid angry confrontations with soon to be laid off employees.  Cons:  Laid off employees will eventually hear the news about salary and benefit increases and will be angry anyway.  If we hold off telling retained employees about improved benefits, some may decide to leave for other jobs. Not being forthcoming about our restructuring plan makes Weymouth look less than ethical and fair in its practices, and the media would pick up the information and report it.

CHOSEN RECOMMENDATION:  Adopt Solution #1 as the best option to clearly and fairly communicate reasons for restructuring, layoffs and salary benefit restructuring for retained employees.