It’s a tough one, and a quandary being faced by employers all over the world. The money isn’t coming in, so what do you do? Take out a loan you might never be able to repay? Drop your staff to four day weeks? Or lay off some employees to save the jobs of others?
Last week General Motors announced it was sacking nearly 50,000 employees globally, as well as asking for $30US billion in government loans in a bid to keep afloat.
More and more companies are asking staff to go part time rather than be forced to give up their jobs altogether. The BBC has put a freeze on pay rises for senior managers and bonuses for all employees. And it’s not just companies doing it too. Earlier this year California’s governor Arnold Schwarzenegger ordered all state employees be ‘furloughed’ for two days a month, (that is, take two days off unpaid) to try and save $1.5billion from the state budget over the next 18 months
Of course, it’s not just employees that are feeling the pinch. Across India CEOs of big firms are taking pay cuts. But in the UK the big news today is that a LDV, a van manufacturer with a Russian-owned parent company has asked the British government for up to $45US billion in loans to help to restructure so it isn’t forced to sack more of its 900-strong workforce. The reaction so far has been mixed.
So what should companies do? If you run a business that’s in difficulty, what are you doing to keep it afloat? How tough is it to tell a loyal worker that you have to let them go, or ask them to take a pay cut?
And if you’re an employee, what would you be prepared to do in the short term in order to keep your job in the long term? Go to four day weeks? Put off retirement for another few years so you’re not dipping into your pension? What are you prepared to sacrifice in the short term in order to ride out the tough times with your employer?