About a month ago, the company I’m contracted to offered a volunteer separation package to 2,400 employees in the United States who held non-sales positions. The goal was to incent two hundred employees to leave. The package was only offered in the United States because those workers are the highest paid. Almost five hundred employees requested the separation package.
Two weeks ago, the company granted the package to four hundred employees. The rest were told they had to stay, or they could leave the company without a separation payment.
The four hundred employees left last Friday under the separation program. Others chose to leave without the package. Today, the company is in chaos. There wasn’t enough time to fully transition responsibilities. Departments are scrambling to figure out how to continue to do business. Jobs are being moved offshore. Product launches have been delayed. It’s a complete mess.
All of this is an attempt by the Private Equity owners to reduce costs. The PE owners wanted to take the company public but those plans seemed to have been put on hold. Rumors are running rampant about the company being put up for sale or divisions will be spun off.
The PE owners loaded the company up with debt. Interest payments consume almost half of the company’s revenue. They have only succeeded in ruining a once vibrant company that was a respected market leader. It’s a shame.