Layoffs at Jobster

I have been a big fan of Jason Goldberg, CEO of Jobster. I became an even bigger fan when he made those comments about Monster Worldwide and calling it a “crap product” and comparing the site to NASCAR. I could not have put it any better myself. His words have obviously had some effect on Monster as their latest commercial indicates.

Now Jobster is announcing that half of its workforce will be laid off in order to keep his promise to shareholders. How did Jobster ever get that big? 145 employees in their Seattle headquarters to be exact. A look at their corporate headquarters also demonstrates that Jobster did not learn from the dot com bubble burst earlier this decade. Companies, such as Boo.com, lived and worked on the lavish side. This ultimately led to their demise.

Reducing the workforce has become an automatic response for many companies who need to cut costs to look good for Wall Street. Craigslist, another massively successful website, only has a handful of employees to run it. Restructuring is never easy, and cutting costs are never fun. However, you can make the best of a bad situation by being honest with your employees.

Alternatives to Layoffs

1. Offer a voluntary sabbatical to employees. A sabbatical is a prolonged hiatus that can typically last one year, in the career of an otherwise successful individual taken in order to fulfill some dream, e.g. writing a book or travelling extensively. Sabbaticals are very common in the academic world and other institutional employers by offering their employees as a paid employee benefit. Leading consulting firm, Accenture, offered a sabbatical to its 1,400 consultants in June 2006. The program gave the employees 20 percent of their salaries and continued benefits for the next six to twelve months. The employees are allowed to take another job while on leave, however, they cannot work for a competitor.
2. Refuse to terminate employees at all. Southwest Airlines and FedEx have no layoff policies for their employees. When volume drops, they simply put in place a hiring freeze and cut back on hours.

Creative Lay Off Strategies

415 Productions, a full-service Web development company, offered either an overall 5 percent pay cut, or a four-day work week reflecting the appropriate decrease in pay.

Charles Schwab, the nation’s largest financial services providers of securities brokerage, wealth management,guaranteed a $7,500 bonus for any affected employee who gets rehired within 18 months. The company’s founder and his wife created a $10 million educational fund for these workers, provided that they attend regionally accredited institutions.

Concluding Remarks

There are companies that must lay off people. These companies might have more wiggle room than they might think if they let their imagination run wild for a bit. Organizations need to think beyond financial implications to the impact on other stakeholders. Employees can benefit both personally and psychologically by employers who use their imagination and devise creative strategies to layoffs. Some employees may be able to retain their status with a desirable employer, while being able to pursue a special interest that they have been thinking about for some time.

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