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You're It! How Layoffs Happen and What to Expect

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Michelle Babineau of Boston, Mass. has been laid off three times in seven months. The dot-com veteran has been through it all: the conference with a terse manager and human resources representative; the company-wide announcement led by a weeping CEO; and the "let-go" meeting at an offsite location. Her third job lasted five days. "The CEO quit on the day I started," Babineau said.

Can they do that? Unfortunately, they can - and do. There are a few protections for employees, however. Understanding the implication of laws your employer has had to consider helps you to position yourself as well as possible in a difficult situation.

One of the most prominent employment statutes is the Workers Adjustment and Retraining Notification Act (WARN) of 1989. The WARN act gives workers and their families time to plan for a transition caused by employment loss. Slightly fewer than half of the workers in the United States are covered by the statute, because it only applies if there are 100 or more employees in the company.

According to Heather Gatley, senior partner and vice-chair of the labor and employment practice at the Florida-based law firm of Steel, Hector & Davis, WARN requires employers to give employees and local governments 60 days of advance written notice of plant closings and mass layoffs in the following situations:

  • Plant closing - An employment loss during any 30-day period at the single site of employment for at least 50 full-time employees.
  • Mass layoff - An employment loss at the single site of employment during any 30-day period that must involve at least one of the following circumstances:
    • A reduction that affects at least 50 full-time employees who make up at least 33 percent of the company's workforce.
    • A reduction that involves at least 500 full-time employees.

So, what does it mean to you?  If a large layoff comes, you may have advance warning. Use it.

Business justification and protected classes
It may be of little comfort to the employee hearing the layoff announcement, but from management's point of view, deciding whom to lay off is hardly an act of whimsy. 
Senior executives must establish a documented, justifiable business reason for the layoff and analyze its effect on various protected classes, defined most commonly by age, gender, race, and national origin. Unless the company can prove that its actions were genuine, and not a pretext for discrimination or sleight-of-hand (cutting a department only to resurrect it with a new name and new people), it could face lawsuits, Gatley said. The laws apply to companies with 15 or more employees, and local laws cover companies with smaller numbers.

What to expect if you're laid off
"If you're suddenly called to see people you don't normally meet with, that's a great time to get lost in the corridor," said one recently downsized worker, speaking tongue-in-cheek.

Most likely, your experience will mimic one of the three forms Babineau experienced. The elapsed time from notification to departure could be 45 minutes or three hours. If you receive outplacement services, they will probably start in the next few days.

Whether you're being laid off from a new-economy company or a manufacturing facility, expect emotions to run high in the workplace. "I've seen entrepreneurs cry and everybody in the room cry with them," said Allan Steinmetz, founder and CEO of Inward Strategic Consulting, a change management and strategy consulting firm based in Boston. "You've been working for 15 to 18 hours a day. These people are your life, and it's like cutting off a piece of your arm." 

Outplacement pro Chris Elms of Drake Beam Morin says he spends his time with dot-com clients "trying to contain chaos." CEO and human resources managers may never have been near a layoff and think of their company as family.

For those involved in a manufacturing layoff, physical volatility is part of the environment, according to Randy Uzzell, a certified protection professional and executive vice president at Crisis Management Worldwide, a consulting firm specializing in crisis management and support.

"It's much much more traumatic than a layoff would be to a Generation X-er who expects to change careers eight to 10 times. These people may have expected to remain with their employer for 30 years. It's a life-altering experience for them. Their self-esteem is affected, and people...tend not to think things through in moments of high emotion," said Uzzell. His top layoff goal? "Nobody gets hurt." 

The ripple effect can be far-reaching, as the layoff often has profound consequences for the community stakeholders outside the facility gates.

- Ruth Morss, Contributor

Jan 2007
business justificationEmploymentindustriallayoffsplant closing

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