In today's workforce, many companies are faced with layoffs to cut cost in order to run more effectively. Workforce reduction is commonly disguised in many terminologies such as, downsizing, rightsizing, eliminating redundancy, layoffs, cutting staff or reengineering. Any way workforce reduction is categorized, the objective is to create savings and increase revenue for the company. Many tend to blame workforce reduction on the poor condition of the economy but the overall reasons are profits. There are some circumstances where online distribution companies were forced to downsize due to increasing cost to upgrade technology and decrease in sales.
Fast Serve Inc. a $25 million online Distribution Company was faced with reducing its workforce to accommodate the high cost of technology. Fast Serve markets its products to the young consumer with branded sports apparel. Websites were created to attract the attention of the young consumer, one for boys and the other for girls. Fast Serve moved 10% of its workforce to the online distribution department to accommodate the possible increase of sale. After the website went live, technical problems prevented potential sales due to the website download were too cumbersome for the consumers. Fast Serve decided to discontinue the online division and needed to downsize.
In order for Fast Serve to consider downsizing the company, many employment laws and options must be explored. There is a great risk and potential liabilities involved when making the decision to reduce workforce. Policies and procedures of the company should be followed when deciding to downsize. Companies should always be trut ...