Masters of the Universe

Another update from the Jungle…

Masters1Jim and Tony run a venture capital fund that specializes in distressed assets. They buy companies, replace the management team, cut most of the employees to generate savings and make the company look profitable (on paper). Then they sell the company.

A business magazine features them in an article and uses the term masters of the universe. After the feature article, Jim and Tony decide to branch out from distressed assets and buy a company that has been successful without being spectacular.

Jim and Tony begin their ownership by holding a company-wide meeting with employees at which they talk about the company’s wonderful financial future. This sales pitch is interrupted by Linda who asks them to reconcile these comments with their established practice of boosting profits by firing most workers. Jim evades her question. So Larry asks pointblank how many jobs will be cut. Jim looks at Tony. Tony shrugs. The meeting ends abruptly.

Masters3After studying the company’s bottom line, Jim and Tony decide that the first employees to go are Linda and Larry. They tell Sandra, the HR rep, to prepare the paperwork. She cautions against firing two of the most respected workers. Jim looks at the org chart again and concludes they are peons.

On Friday, Linda and Larry are ushered out the door. Their first port of call is an employment law attorney where they discuss wrongful termination, retaliation, and age discrimination.  The attorney has a vision of becoming famous by taking down the masters of the universe. He agrees to represent Linda and Larry.

Master2Within weeks, a third of the workforce resigns following Linda and Larry out the door. Jim and Tony are initially relieved; they only had to fire two workers. But the remaining workforce is demoralized. Within six months, the company has lost several key clients and the bottom line is tanking. Jim and Tony call a meeting with Sandra to discuss staffing levels and the status of Linda’s and Larry’s lawsuit.

What should Sandra tell them?

  1. She can say that she warned them that firing Linda and Larry would have dire consequences.
  2. She can tell them that as masters of the universe, she expects them to solve their own problems.
  3. She can hand in her resignation, having already received several job offers.

The above scenario is exaggerated but may seem familiar to anyone who has experienced a change in ownership at an employer. Creating a plan with HR for handling inevitable layoffs can smooth the transition. It is also helpful to see employees as more than just a cost to the bottom line.

If your company is struggling with HR issues, Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff as the policies are implemented.


Join the HR Compliance Jungle today. Click here!

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