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Its Been a Hard Couple of Weeks and Now I Need to Let People Go.

My HR director walks into my office and gives me the bad news that I honestly wasn’t expecting. She tells me that our already terrible results will drop even further next month about 20%. At that rate of losses, about $30,000 per month in profit losses. I know what must be done. I need to significantly reduce our payroll by both laying people off and lowering peoples salaries. I have been down this path before of laying people off but never telling people I have to cut their salaries up to 30%.

So over the next week I go through the scenario’s of who I will keep and who I will let go. I determine how much the savings is and how to keep the team I have together for the “future” upswing in my business. I tell everyone, which I believe too, that the future for our business is just too compelling and that many of our competitors will go out of business leaving us with a great opportunity once our industry improves. If I didn’t believe this myself, I would pull the plug on the business just like I have down with 2 of my other businesses.

It takes me 2 weeks to fully let people go and to tell everyone about the pay cut due to the fact that I couldn’t do it when I want because my #2 person is out of the country. I begin to lose a lot of sleep and eat a ton of food. The progress  I had made over the last two months of improving my health and moral goes down the tubes.

When  I finally do tell everyone, it is very much like my past experience in doing this, after it is over I realize it wasn’t so bad and that we will be ok although it is again depressing that I have taken yet another step backward and I will have to build all over again.

Originally posted on 5/21/2010

Financing Solutions (www.payrollfinancingsolutions.com) provides fast business funding of $5,000-$100,000 to good small businesses with sales of $500,000-$7 million that can be used for working capital.

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