The Layoff - Astrigo Holdings Case Study

Paper Critique

The Layoff- Astrigo Holdings Case Study – Harvard Business Review

Astrigo Holdings is a Home Improvement Stores. The company was established in 1962 by Mr. Astrigo. It has 12,000 team-mates. The goal or vision of this company is to take care of their customer, selling highest quality goods at the best price and give their customer the best service in the world which will be attained with the help of talented and innovative team members.

Basically this case study talks about how their Top Managements looking at various aspects to save the organization from further damages and of course Layoff being the priority for some. The main aim being cutting cost method that first to come to their Top Management’s mind was axing their staffs to achieve that goal. Company layoffs result in a low morale for existing employees, customers and also investors. This could mean terrible things for the business.

The Team

Robin Astrigo – CEO

Morris Meyer – CFO

Lisa Warren –Head, Legal

Marzita Vasquez – Head, HR

Bob Slater – Executive Director of Strategy

Sushil Bhatia – VP Marketing and Strategy

Julie Cox – PR Team

Different background of this Top Management made them to prioritize things at the different aspects as Finance was focusing on cutting cost, Legal was looking at minimizing risk, HR was looking at easing their administration work and of course as a CEO, Robin was concerned about the values. The conflict between Morris and Lisa was on how to Layoff without causing any damages to the company. Morris suggested 10% of workforce reduction will generate enough savings to keep profile in line with Wall Street’s expectations. He too feels that cutting the middle management with first-in, first out policy is the best way to get-rid of dead-wood will be the easiest way to handle things. They too had in mind that Robin was not keen in cutting back on Store associates as it will directly affect the customer service. On the other hand, Lisa feels the Layoff should be based on evaluation or performance by eliminating the lowest 10%. She feels by doing this Rank-and-Yank they can secure the good and talented employees but Morris denied it by saying it will take time and needs a lot of work which Lisa is very positive about as it being good for company, developing a higher performing workforce overall (march or die). Morris also said that people who have been working the longest would have made enough money and they are near retirement so would not be too effected with this early retirement plan.  

As for Bob Slater (Director of Strategy) and Marzita Vasquez (Head of HR), there was a conflict between laying off people who have been with the company the shortest or shutting down an entire acquired unit. Bob feels if the company follow last in, first out policy, they don’t need to pay a lot to people base on less tenure of the employees. Marzita pointed out that there will be risk losing the best talent if they do so, furthermore she feels that Layoff is a short-sighted cost cutting measure and alerting everyone that the company is in trouble. Her point was, the company has over-reached. According to her, the company can be saved by selling or shutting a unit down without affecting the morale of the employees. She also feels that people will be reluctant to join the company in future if Layoff implemented as for which Bob Slater feels that they don’t need to worry about what’s going to happen tomorrow.

 Sushil Bhatia, Vice President of Marketing and Strategy, suggested that a company layoff is not necessary to improve the company’s minor recession. He simply suggests a five percent pay cut across the board to decrease overall costs. He also mentions that many employees see no need for multiple layoffs because the company keeps a great amount of money in the bank in case of any company acquisitions and it will not look too good if a large bank account does not justify the Layoff of the company. On the other hands, Julie Cox felt very scared of the whole rumours and feeling very emotional about it as for which Sushil informed Robin without mentioning names that rumours about the layoffs will affect employee morale and will indirectly affect the investors on a long run.