You only get what you give.
29 March 2007
Circuit City said yesterday that it had fired 3,400 of its highest-paid sales staff and will replace them with lower-paid workers, a risky strategy to cut costs that goes beyond the layoffs, buyouts and hiring freezes commonly used by struggling companies.
-Via
3 March 08
(AP) Circuit City Stores Inc. said Monday it is closing about 20 percent of its U.S. stores and cutting thousands of jobs in an effort to return to profitability as it finds consumers reluctant to spend and its vendors less eager to give it credit.
-via
Perhaps this is a bit of post-hoc reasoning, but it seems to me that when you fire your most experienced and most loyal employees, this has cascading moral and competency effects. You no longer have solid base of informal training which can help new folks get up to speed much more quickly. It causes your medium term employees start looking over their shoulder, wondering if they should jump ship. Also, you take an immediate hit to your customer service ability. Not to mention the PR disaster– I’ll never shop at a Circuit City again.
Lesson: A company may be screwed if they treat their employees well, but they are definitely screwed if they treat their employees like interchangeable cogs…
