Mass layoffs no easy task – is BlackBerry doing it right?

Don’t leak news until all your ducks are in a row: Expert
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 11/27/2013

Back in 2001, in the months after the Sept. 11 terrorist attacks, Cissy Pau was an HR manager at an aerospace company facing major losses. In the end, it had to lay off three-quarters of its staff, or about 350 people, over a two-year span.

BlackBerry is facing a similar situation today — albeit on a much larger scale. In September, it announced an “ongoing workforce reduction” that will amount to 4,500 employees or about 40 per cent of its workforce. At press time, a few hundred employees had already been let go.

Laying off such a large percentage of a workforce is no easy proposition, according to Pau, principal consultant at Clear HR Consulting in Vancouver. And while mass layoffs are difficult, as companies such as Nortel, Zellers and Air Canada well know, there are right ways and wrong ways to go about it.

“It’s a terrible situation to be in… It’s a lot of work, it’s a really emotional circumstance,” she said.

“When we did this, the biggest overall theory was we wanted anybody who left the company to still be a champion for the company going forward, especially for a company like BlackBerry, where they still have a customer base and they’re still a going concern — you want people that leave to speak as positively as they can about the company and not slag them in the media…. If you (keep) that framework in mind, then it really guides how you do the termination and the preparation you do in all the terminations.”

Consider alternatives

BlackBerry has faced several years of hardship, but any company planning layoffs should first consider alternatives, such as extended vacation time, job-sharing or employee transfers, according to Henry Hornstein, assistant professor in the department of business and economics at Algoma University in Sault Ste. Marie, Ont.

Employers don’t always realize the costs involved with outplacement services and severance, he said.

“This is something that’s not given enough weight by the people… because it’s not just getting rid of people, it’s a whole lot of other things that are associated with downsizing that have to be considered.”

In a regulatory filing Oct. 2, BlackBerry predicted $400 million in expected charges — for severance, “network simplification costs” and other expenses, according to Reuters. The company originally announced the layoffs — part of “difficult but necessary operational changes” — in its quarterly financial results on Sept. 20.

Employees should not be told about mass terminations until the company has all of its ducks in a row, said Pau, adding “it’s a very delicate dance that happens.”

If the employer decides to do the layoffs in waves, HR has to consider the severance arrangements, working notice arrangements, group termination notices and continuance of benefits — along with the whole morale issue, she said.

Pau’s previous company announced the layoffs all at the same time, even though they would be staggered.

“We thought, ‘Let’s do it over that time period as opposed to people coming in every day on eggshells thinking, ‘Is today the day?’” she said, adding employees ended up organizing get-togethers at local pubs to wish people well each time layoffs went through.

The company was also determined to tell each employee one-on-one. Managers had to advise 20 to 30 people, in a union seniority order, with 15 minutes per person.

“You can imagine the logistics nightmare,” she said.

In a case such as BlackBerry, there would have to be group terminations because of the number of people impacted, but there would also be individual discussions around each person’s termination package, said Maysa Hawwash, national director of talent management solutions at Drake in Toronto.

And it would not be unusual for a company to offer inducements to key employees so they remain on the job and help move things forward.

“I wouldn’t be surprised if BlackBerry is actually providing such incentives for people to stay and manage the change,” she said.

Outplacement services also make a lot of sense. Pau’s previous company offered in-house workshops providing job search techniques and resumé-writing tips, and counselling was provided.

For senior executives, the conversation revolved more around “What is your positioning statement in terms of talking about your accomplishments?” she said.

HR also has to be prepared for a lot of questions around issues such as employment insurance (EI), EI repayment and pensions, said Pau, whose previous HR department put together a FAQs (frequently asked questions) document in anticipation of employee queries.

Legal considerations

Since it is not federally regulated, BlackBerry would fall under provincial employment standards legislation. In Ontario, the required notice period for mass terminations under the employment standards act is determined by the number of people losing their jobs, said Hawwash. And if a company lays off 500 or more employees, 16 weeks of notice are required.

“That in itself increases significantly the financial impact… so it has to be taken into account,” she said.

The employer must also provide information around the economic circumstances surrounding the termination, alternatives that were considered and a statistical profile of the affected employees.

“There’s a lot of administrative burden on BlackBerry as they start addressing these issues,” said Hawwash. “They cannot pursue any of those termination notices until all the information is provided and approved, so there’s a lot of responsibility for disclosure and providing as much information to the legal entities — as opposed to regular terminations.”

Communications

When one wave of layoffs went through in October, BlackBerry said in a statement: “We recognize our local employees’ hard work on behalf of our company and the difficulty of this news. And we will do everything in our power to treat our employees with compassion, while offering support during this time of transition.”

Communication is a huge part of the equation, but many employers provide minimal information, said Hornstein.

“It’s a situation that really doesn’t need to happen. Organizations, if they’re honest with their people, let them know what’s happening, they encourage them to participate. That’s the best strategy, even under difficult situations. Because employees, when they’re treated like adults and treated with respect, they will step up, they will try and help as well.”

The best strategy is transparency, said Hawwash.

“(It’s about) really providing consistent messaging, providing frequent communication to employees. And just share the information without sugar-coating it,” she said. “You’re not going to have a lot of credibility if you don’t share that information upfront — it’s all over the news so… the sooner you let people know, the better.”

HR should also let people know about what resources are available, to keep them engaged throughout the process.

“You want to have an environment where people feel a little bit supported, either through career counselling or even social support or psychological support, whatever,” said Hawwash. “Obviously, being compassionate about that impact will be critical to how well the brand is preserved, as well as the long-term impact on the remaining employees.”

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