Tuesday, November 10, 2009

Economic Impact: Layoffs

I have worked in the non-profit field for my entire career, most of in at colleges and universities. I currently work in a large non-profit that functions more like a corporate services firm in the student loan industry.

Because of the pending legislation surrounding student loans, my company has had to restructure itself. The FFELP program is being phased out, and as such, my company won't be in the origination business any more. Yesterday, over 100 people at this firm (17% of the workforce) were laid off.

Universities and colleges don't do layoffs in the same way that corporations do, and as such, this is my first time in a layoff environment. I wasn't here yesterday when the news broke, but I did get a text message from a former employee and friend who asked me if I was okay while I was in class. I thought she meant I'd been fired in my absence, and promptly panicked. It took a few emails and phone calls to find out that my job is safe.

Coming in to work today, the tension is palpable. The floor seems very quiet, and I'm acutely aware of several people who aren't here. I'm grateful that my job is relevant to the company's new organizational structure, but I feel terrible for those who lost their jobs.

Yesterday, in my IT Management class, Madge Meyer, EVP at State Street came in to speak, and she mentioned a project she launched that resulted in laying off a significant portion of the IT department. I asked her (not knowing that in a few hours I would be finding out that my company was laying off staff) how she handled the layoffs. Wasn't she worried about the tension it would create? How did she handle such an unpleasant decision?

Her answer was that it was important to move those who were "stuck in the mud" out of the company, and that most of those whose jobs were cut were given a very generous severance package. Most were actually bought out. She was very positive about what had happened. I know that here, its necessary to consolidate and streamline, and I understand the business case for this, but it's still unnerving.

I'd love to hear from others who have been through layoffs. How did you survive or not?

4 responses:

Michael A. Burstein said...

My wife has been through many rounds of layoffs, throughout all of which she has kept her job. She might have better perspective on the question than I do. I've been through layoffs only once, and it was in a different department.

Unknown said...

The truth is, not everyone that gets laid off is "stuck in the mud." Though I must admit, sometimes being the one left behind is much harder than being the one let go. Those left behind not only get to take up the slack left by the departed, but also need to constantly evaluate if they might be next. These are trying times for everyone.

Anonymous said...

Consider yourself lucky. I was in higher ed for ten years previous, but left two years ago to try something new. My company did not do well--the economy just one of many reasons--and they struggled.

They should have laid some people off, but they didn't. They should have cut costs, but they didn't. Instead, they stuck their heads in the sand and let the money dwindle to the point that they couldn't make July's payroll.

I've never been unemployed, but not getting paid is a deal breaker, so I laid myself off and went nearly two months without a paycheck. It was stressful and frustrating.

I can see now that companies that realize they are in trouble early and can find ways to cut down on costs are just doing what is best to keep the company viable. It's not personal and it certainly better than simply not getting a paycheck one day.

Aaron Weber said...

It's never pleasant or easy, but it's sometimes necessary. People find a way through, though. We're like weeds that way.

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