Cutting Jobs - A Painful Exercise, So Do It Right - Modern Distribution Management

Cutting Jobs – A Painful Exercise, So Do It Right

Layoffs and other cost-cutting measures in building materials have begun in earnest, with several distributors and retailers announcing workforce reductions" in the past week.
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The Home Depot, Atlanta, GA, will cut upwards of 950 jobs, many from its three call-center operations that work with customers to install doors and other products. An HD spokesman told Reuters that the closings were not solely due to a down housing market. The retailer wants to give customers a local contact for installation help rather than send them to a call center. Still, HD is hurting, posting a 27% drop in profit in the past quarter.
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UK-based Wolseley said it would cut its workforce in North America by at least 1,300 more this year, mostly in its Stock Building Supply subsidiary. ...

Layoffs and other cost-cutting measures in building materials have begun in earnest, with several distributors and retailers announcing workforce reductions” in the past week.
&nbsp ;
The Home Depot, Atlanta, GA, will cut upwards of 950 jobs, many from its three call-center operations that work with customers to install doors and other products. An HD spokesman told Reuters that the closings were not solely due to a down housing market. The retailer wants to give customers a local contact for installation help rather than send them to a call center. Still, HD is hurting, posting a 27% drop in profit in the past quarter.
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UK-based Wolseley said it would cut its workforce in North America by at least 1,300 more this year, mostly in its Stock Building Supply subsidiary. 84 Lumber, despite several recent store openings, announced its third round of job cuts in a year with 40-45 positions disappearing at its corporate headquarters.
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Noland Company, Newport News, VA, has cut 45 jobs over the past month due to the national housing downturn. The distributor sells plumbing and HVAC supplies, mostly to construction end-markets.
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And the list goes on.
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Companies both big and small in tangential markets are taking cost-cutting measures as well. Georgia Gulf has temporarily idled its PVC resin manufacturing capacity in Canada. Demand for the material, which is used to make plastics and other building materials, has fallen. That company reported only a slight profit in the third quarter (less than $100K), a dramatic drop from the more than $20 million in profit it reported last year.
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Are you considering a workforce reduction in the near future as part of a cost-cutting strategy? Steve Deist of Indian River Consulting Group says before you jump in and start slashing jobs from a budgetary standpoint, think strategically so that you don’t damage a most valued asset -your workforce. (Full Article)

  • Don’t rely solely on department managers to select staff cuts. Use recent performance appraisals and solicit input from additional sources like customer surveys and other managers.
  • Don’t depend on voluntary early retirement. You will tend to lose the best performers who are most marketable elsewhere.
  • And don’t cut “rank and file” pay. Pay cuts leave affected people in place to spread bitterness and resentment. Reductions in upper management pay, however, are a viable tactic. Top management has a bigger stake in the company’s future so will likely be more receptive.

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