Case Study

After the Layoffs, What Next? By Suzy Wetlaufer

After the Layoffs, What Next? By Suzy Wetlaufer

What is the problem/issue in the case?

The main problem/issue within this case revolves around the new CEO of Delark's. Harry Denton who was brought in to change the image of the company. But ultimately, he simply focused on strictly downsizing the company by laying off a significant number of employees (20% for a total of 3,000 people) and the closure of various establishments that did not fare well in terms of business. Seniority was not even taken into considerations when laying off the employees and the issue revolves around this.

There is a danger; Delark's staff reductions have an adverse impact on protected groups such as older workers or minority employees. If the personnel decisions have not taken adequate support, someone may infer that it is a system of intentional discrimination rather than a simple attempt to cut costs. This will create unnecessary tension, and it is probably reason of subsequent lawsuits (Wetlaufer 1998).

Delark's have seen cases in which lower-level managers have taken advantage of reductions to get rid of specific employees for illegitimate reasons. He may not want to work with employees of a particular social minority, another 35 years, may feel that you have too many workers over 50 and want a younger team, and so on. He is also seen cases where a worker with a disability or illness, have owed much of his time off work for it, and that has upset its director. Must define the appropriate control mechanisms to prevent this subjective attitudes can influence decision-making.

He laid off people very quickly because he thought that this was the least intrusive and the gentlest way of laying off employees. From this, Denton was under a lot of heat from the surviving employees after the downsizing and even from the new employees brought into the company. Additional element to the downsizing were his inefficient methods of dealing with potential terminated employees because of his negligent actions of not holding meetings between the terminated employees and himself. Additionally, when Denton took over the company, he decided to refurbish, and renovate the style and look of the buildings. There was a lot of costs involved in the overhaul and this was yet another reason for downsize to reduce the salary and wage costs and to allocate them to renovation.

What are the facts in the case that support this problem/issue?

Harry Denton brought in as the new CEO to repair Delark's from financial difficulty. He worsened the state in which the company was operating. By laying off, approximately, 3,000 employees within the firm with little to no warning (the lack of meetings). It is focusing on allocating costs towards renovations in order to change the image of the company. It is striving to elevate the company from its financial losses. Denton came under a lot of scrutiny from all over the Delark's department stores. The closure of the Madison expansion is an example because the owner there, ...