The Right Time for “Rightsizing”

The employees of Computing Consultants Corporation have always enjoyed working at their company. There are not many places people can go to work where there is a casual work environment, with a corporate culture where the employees feel valued and are rewarded for their work.

The company based in Chicago since 1984 and has four satellite locations located in Dallas (1987), Seattle (1989), Miami (1991), and Boston (1991). In each location including Chicago they have a V.P. of Operations overseeing the branch. The company then has four directors at each location a Director of Operations, a Director of Finance, a Director of Human Resources, and a Director of Marketing. The directors all oversee a Manager of each department, who in turn oversees the employees of the specific department. Each location generates approximately five million a year, so the company generates about twenty five million a year in revenue and is breaking even yearly.

The Operations department is made up of the core staff that actually goes to other businesses who ask for consulting on IT projects of various sizes and issues. This department has normally twenty five to thirty such consultants that cover the region that they are based. The cost of this department annually nationally is sixty percent of the total revenue generated or fifteen million dollars.

The finance department oversees the original estimates of the consultant projects and handles the billing of the customer as well as the payment of all bills that may need to be paid for providing this service (i.e. travel expenses, phone bills etc). Normally there are about six people that work in the finance department under the manager. There are two that do accounts payable, two that do accounts receivable, and two that figure estimates of consulting projects. The cost of this department annually is about five percent of revenue generated or about one and a quarter million dollars, and is considered a revenue generating department since it collects accounts receivables.

The human resource department is staffed with two recruiters, a payroll and benefits specialist, a human resource legal specialist, a Employee Assistance Program specialist and all of the administrative assistants within the building are considered part of this department which is usually twenty to twenty five. This department is a non-revenue generating department, and cost the company because of the specialty of the employees about ten percent of their revenue or two and a half million dollars.

The last department is marketing. This department includes ten outside sales reps that and five inside cold call specialists that are responsible for generating business for the consultants, as well as two advertisement specialists who place ads in various business and computer related media.

This department costs the company approximately twenty percent of the annual revenue or five million dollars.

The corporate employee overhead of the company above that already mentioned is five percent of the total revenue generated or one and a quarter million dollars.

The economy has had a devastating impact on the business this year and it looks even bleaker for the year 2009. The company President Conrad C. Omputer is now considering ways to cut expenses. All five branches sales have declined evenly so he will have to make cuts at all the five locations. This choice is going to be hard as most of the employees at Chicago have been there since it opened twenty four years ago. Dallas opened twenty years ago and some of the original employees from Chicago transferred there permanently to run that location, and hired many of the employees that still work there today. The Seattle office was staffed with new people when it opened and some from Chicago and Dallas went and trained that staff for a few months. Therefore most of the employees in Seattle have been there for nineteen years. Miami and Boston when they opened because it was two locations in one year employees transferred from the other three branches to start that location. Therefore, there are employees at these two locations with seniority of seventeen to twenty four years in all departments. There is George Tech who has been there the least number of years fifteen but is a Director of the Boston location. President Omputer needs to figure out a way to “rightsize” the company in a fair and equitable way since sales are down by fifteen percent with revenue for 2009 projected to be approximately twenty one million.

Mr. Omputer has many options to weigh in the next two weeks. He could downsize by department or location. He could downsize by seniority in each department at each location. He could ask for voluntary resignations in each location by department with a restriction of how many per department to ensure that a whole department does not resign. Then there is the issue of morale for those that stay in after restructuring. They will be wondering if they will be next to be asked to go, not to mention having to do more work and not having the camaraderie that once was there with the employees no longer there.

Mr. Omputer started this business knows almost everyone personally and can not decide what to do. Therefore, he has called for the help of Business Communicators 2.0 to assist in consulting his company on what to do and how to go about notifying the employees of the plan to “rightsize” the company.