Jay Kotnis went numb.
He was sitting in his manager’s cabin. Manager was saying something to him but he did not know what it was. Involuntarily he had stopped listening after he listened to his manager’s first couple of sentences. The manager had said, “Jay, I had no option but to include you in the list of managerial employees to be laid off due to recessionary pressures. You have been laid off with immediate effect. In case we start recruiting again, you may be one of the firsts to be contacted.”
After that, the manager went on telling that the company had downsized company’s employee strength by 35% and many more details regarding recession and its adverse impacts on the company.
However, Jay Kotnis was totally oblivious to his manager’s presence. He went numb.
He felt humiliated.
He felt shocked.He felt angry.
He felt revengeful.He felt diminutive.
He felt worthless.
And he felt more emotions but he was not in a position to know what they were.
Slowly the enormity of being kicked out of the job dawned on him. He had invested a good amount of his hard earned savings in buying a new home and a second car for his family at artificially escalated market prices. If he had no income, how was he going to pay back the loan? Would he be able to hold on to his home or will he have to foreclose it? Will he have to sell off the second car meant for his wife and his 8 years son? How will he manage the huge school fee? Can they manage their grocery expenses and other monthly bills?
For a moment he went blank again. Suddenly he went into delirium.
Lots of mixed up thoughts were circulating in his mind, “What will his wife think of him? What will his son think of his dad? I will lose my esteem with them. How will I explain to my neighbors? What will I tell my parents? People are going to mock at me.”
Then suddenly, he felt a bit better thinking that it was none of his fault. He had been giving his best as a competent professional. He did not make mistakes. He did not bring in the recession.
“They were those nincompoop ba----ds sitting on top of these kinds of companies who are messing up with the whole economy and markets and the public at large is badly hit by it. Thousands of families are being uprooted left and right by the actions of these greedy, unscrupulous, corrupt, shortsighted goons. They keep fooling the people by singing songs of inflationary economy, glamorizing the concepts of living for today on borrowed money and many such horrendous ill conceived selfish ideas. They continue drawing the unimaginably disproportionately high, undeserved salaries and bonuses despite the recession and to compensate for it keep kicking out the people who make money for them and keep destroying their families.”
After all these initial outbursts in his mind, he calmed down a bit. His rational mind took over and he got ready to face the new challenges of being a jobless. He thought that like the company he was working, a great number of so called prestigious companies were also laying off their employees in tons. It is not going to be easy to get a decent employment soon. How many months will he have to wait? He was not too sure.
In the silence of the night that day, he sat in his study room and started coining with various possibilities. After thinking about many alternatives, he decided to work as a self employed person. He had sufficient savings to last for 1.5 years after giving away the monthly bills and paybacks towards the loans. He found that he would work hard as an entrepreneur and within 1.5 years, he could start earning a reasonable income with his new venture. He felt somewhat elated and he did not know when the sleep overtook him.
His wife woke him up the next morning and seconded his decision of going ahead self employed. He could sense the genuineness of the support coming from his wife. That filled him up with the kind of mental strength that he needed to start off on his own.
It took him more than 2 years to setup his new venture and decent amount of money started flowing in. It took a little longer that he had planned because of the prevailing recession.
The recession phased out over four painful years. Once again, the things were back on track. Human memory is very short and most of the people in their daily struggle of living do not have time and energy to indulge into the philosophies of recession etc. All they do it to pray that the recession should not occur again.
But when the things are not sorted out from the root levels and only superficial treatment is meted out by the people whose very job is to ensure non recurrence of recessions, the next cycle of recession definitely knocks at the door. So once again after a gap of some 11 years, another round of recession gripped the whole world, this time still more severely.
During these 11 years, Jay Kotnis, with the full active support of his wife, set up his new company. The company grew to a good size. The company enjoyed good reputation as an ethical company, its products and services were rated high by the customers and employees were a highly satisfied lot. It was bound to be so since Jay Kotnis was running his company on following sound principles:
- Eye on long term keeping short term interests as important.
- Effective and efficient running of company resulting in minimum wastage and minimum overall costs.
- Pricing structures more guided by the overall costs of providing products and services and not necessarily being dictated by the market price trends. (It was possible because the company constantly kept a close watch on its overall costs).
- Not being a greedy organization. Aim at only reasonable profits.
- Increase the market shares on sound principles of winning customer loyalty.
- Constantly build up the company reserves. The company reserves will be maintained at levels where even in rainy days, the company will have sufficient funds to look after the interests of all of its stake holders, the most important being the employees and also, the interests of the customers.
- Build up the manpower in the organization in a sensible way.
- The highest salary will be within a maximum of ten times that of the lowest salary in the company.
- Remain a zero lay-off company even in the trying times.
Jay Kotnis’s company was not left untouched by the onslaught of recession. This was confirmed by the vice president (finance) who conferred with Jay Kotnis one gloomy morning.
He said to Jay Kotnis, “Mr Kotnis, we are in a very tight situation. I have worked out various scenarios. And though, I know that you are not in favor of lay-offs and it’s like our company’s policy, I do not see any other alternative. We cannot carry all of our employees with us during the entire recession span with the kind of reserves we have built up. They are good by any standards but with the existing salaries we cannot sustain beyond 2 years. We must consider laying-off at least 40% of our employees right away if we wish to continue running this company.”
Jay Kotnis thought over the matter for a good length of time. His thoughts took him back in time by 11 years. He saw a clear picture that he was being fired from his job ruthlessly by his earlier employer where he had worked so very professionally. He shuddered once again with the trauma he had experienced while being kicked out of the job in the last recession. He could imagine that his company’s employees and their families would experience the same trauma if he fired them from their jobs which they did so diligently day in and day out.
Jay Kotnis decided, “No one will be out of this company. We will meet up with all the employees batch by batch and speak with them.”
Jay Kotnis spoke with each batch of employees, “We are reeling through recession and its negative impacts on all of us. Our financial analysis says that despite our decent reserves we cannot pull on for next 4 years which is the estimated time over which recessionary trends will prevail. We have been doing our best on all the cost reduction fronts. We are already good on other fronts like prices and quality of our products and services. We will be able to run the company at the existing salary levels for a maximum of 2 to 2.5 years. Cutting the salary costs is being achieved by a very large number of reputed and not so reputed companies by way of laying-off their employees though their top managers and CEOs still enjoy unimaginably fat salaries and perquisites and bonus. Our company policy does not believe in laying off the employees who work so hard and sincerely for the company. But we can still reduce the costs without any lay-off if all of us agree to take a cut in our salaries. We will need to take a 50% cut in the salaries if we wish to survive as a company. I am willing to take 50% cut in my salary and so also all of my heads of the departments. I request all of you to think over, consult with your family members and give your decision within a week. Thanks.”
A week passed. The employees were consulting with each other. Some even checked company’s financial position and its reserves. The employees also consulted with their wives and other members of their families. They were observing the people who lost their jobs in other companies. Soon they were getting acquainted with the harsh realities of life without a job. Most of them were getting convinced that they would be much better off with 50% of their existing salaries rather than some of them getting noting. They were also appreciating the genuineness of the top management who had volunteered to declare their decision of taking 50% cut in their salaries. They also knew that their top bosses were not drawing obscenely vulgar levels of salaries as other CEOs were doing in other companies. They decided to cooperate for their own good.
The employees gave in writing to Jay Kotnis their desire to cut their salaries by half and continue to work in the company.
Jay Kotnis implemented the decision. He and his wife were very happy that day.
Related Book
"Sensitive Stories of Corporate World" (available from Amazon, get it online)
Read many more management anecdotes/management case studies in the eminent author Shyam Bhatawdekar's best selling book "Sensitive Stories of Corporate World" available online from Amazon as an eBook as well as a printed book.
Other Related Reading
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For “out of box thinking” articles by Shyam Bhatawdekar, refer: (Out of Box Ideas) http://wow-idea.blogspot.com/
Read other blogs of Shyam Bhatawdekar at: (Home Page for Writings of Shyam Bhatawdekar) http://writings-of-shyam.blogspot.com
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