Case Title:

Managing Downturn without Downsizing (B): Innovative Job Saving Schemes

Abstract:
This case study is sequel to the first case study Managing Downturn without Downsizing (A): US Financial Crisis and Layoffs, and focuses on the impact of layoffs on employee morale. The labour market was badly affected by the 2008 US financial crisis as companies across the world were sacking thousands of employees. As a result, the unemployment rate in the US reached 8.1% in February 2009 highest since December 1983 and was predicted to increase further. While experts are criticising the widespread layoffs initiated by the companies since it is indirectly impacting on the economy, companies claim that layoffs are inevitable for their survival. This case study is suitable for debating on whether companies should cut job during troubled times and the impact such job cuts would have on the morale of existing workforce. Further, the case study also provides the innovative job saving techniques available for companies using examples from the past.

Can companies survive the crisis by adopting innovative saving schemes instead of laying off people? Will innovative job saving schemes extract the best from retained employees? How will the laid off employees find employment when the condition of the economy is unstable?

Pedagogical Objectives:

• To understand the impact of layoffs on existing employees and how talented employees can be retained
• To debate on the base and means for the displaced employees to carry on their normal life and to examine the options left out for displaced employees
• To understand the various innovative job saving schemes and also to explore new job saving schemes, if any

Course: Strategic management

Concept: Managing troubled times

Key focus: Talent management