Reference no: EM132963170

You are the Director of HR for a small (120 employee), family-owned company that provides cleaning services to local businesses. 

The leaders of this company met to discuss the future state of the organization. It was disclosed that revenues have been on a steady decline for the past three consecutive quarters. Business is down and during this time period, it has become common to reduce employee hours and cancel shifts. This has caused a number of problems with employees, given that the "operations" jobs are hourly. The owner is concerned because of the large amount of employee fixed costs (i.e. insurance, paid time off, etc.) and has come to the conclusion that in order to keep the company operational, the number of staff will need to be reduced by 20%. This is the first time in the company's history that this type of action will need to be taken and the owner is looking to you for advice as to how to handle this reduction in force. 

A response that addresses the following:

• How the reductions will be determined (seniority-based system vs. performance-based)?
• Any type of communication that needs to occur prior, during, and after the reduction.
• Any other procedural items that need to be considered (i.e. severance, outplacement assistance, legal issues, security, etc.).