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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

1530.0. ""Downsizing In U.S. Field" + Q&A on downsizing" by TLE::AMARTIN (Alan H. Martin) Wed Jul 10 1991 19:02

Digital Internal Use Only

				digital today

Volume II, Issue 22						July 8, 1991

			   Downsizing In U.S. Field

MARLBORO, Mass. -- As part of the re-shaping of Digital, with emphasis on
profitable growth, the U.S. Field will reduce by 1,000 employees.  Employees
that are affected include sales and sales support.

This decision is based on work force planning that has been done on an
organization-by-organization basis throughout the company over the past 18
months.  In phases 1 and 2 the first efforts for downsizing took place at
Field Headquarters.  To date, Digital has outplaced 10,000 people.

The primary criteria used in planning for downsizing was work elimination and
consolidation.  Where, because of the affordability of similar jobs, a group
needed to be downsized, work performance was added to the criteria.  The
review processes, which were conducted by three levels of field management and
Personnel, ensured that the downsizing did meet the requirements of the
business, that skills were matched to job function, and that performance was
recognized.

To remain in business Digital must become more profitable.  Digital is
re-shaping the way it conducts business; the re-shaping includes work
consolidation and elimination.  The company is focusing on customers and the
total solutions that they require to remain competitive.

The outplacement agency of Drake, Bean and Moran will be used to support the
efforts of those being effected [sic] in finding employment.  They will
conduct five job fairs in addition to helping the candidates focus their
skills and career goals.  Resume writing and interviewing techniques are also
part of the services provided.  The statistics show that the average client
has found a job within 6.8 months and 62 percent have maintained or increased
their salaries.

=====

		     Questions answered about downsizing

Q: Is this the last layoff?

A: Re-shaping of the company will be an ongoing process as it is in many
companies in the U.S. and around the world.  Each change in the market, each
change in the customer mix, will require us to continually look to refocus our
resources at where we gain business.  These changes may cause an increase or
decrease in our employment population over time.

Q: What was the selection criteria?

A: The selection criteria was to look at each account group, determine the
focus of the business, and then look at the requirements that the customer
needs to be successful.

Q: So performance was not an issue?

A: Performance is always a consideration but the first considerations were
business needs and customer needs.

Q: Why was there no voluntary option to this plan?

A: On January 7, 1991, Digital moved to Phase 3 of its TFSO program, which did
not include an option that allowed employees to volunteer.

Q: With so much overhead elsewhere in other organizations why are we cutting
in the field?

A: Work force planning within Digital is being conducted on an
organization-by-organization, business-by-business, and country-by-country
basis.  In fact, downsizing is happening all over the company.  The field was
one of the last organizations to implement downsizing.

During this year we have instituted the (NMS) New Management System to measure
profit by account.  This downsizing or re-shaping of the U.S. Field was the
direct result of us looking to maximize our profitability by account.  The
actions we are taking today are focused directly at maximizing profit at the
account level.

Q: What do we tell the customer?

A: We recommend that each account manager speak to their clients and explain
to them that through our new re-shaping and account management structure and
the organization by account, there will be more attention to the customers'
total needs for solutions to help make them competitive.

Our customers have an investment in Digital's success as well.  And so it is
in our joint interest for Digital to adapt to the changing technology and the
changing economic conditions of our industry.  Explain how we will be meeting
their need now and into the future.

Q: How are we going to get the work done.  Will our budgets be raised?

A: Yes, greater productivity within our sales organization in FY92 is going to
be necessary for our success.  We are going to focus on the lowest cost, most
profitable sales channel to meet the price performance our customers demand
and the profitability revenue targets by account.

Q: Are there currently any plans to change the compensation structure
including the addition of commissions?

A: There are no approved plans to change the compensation structure of the
sales organization.  We continue to look at improved compensation programs to
recognize pay for performance.

Q: How do we respond to customers who are concerned that they will not be
receiving the same level of support that they have had in the past now that we
have fewer sales people?

A: The whole new account structure is to provide more focus to accounts and to
get all the resources in the field lined up to support the accounts.  This new
sales team concept asks the account managers to manage P&L for their accounts
and ensure they provide the total support needed for their accounts.  This
refocusing allows us to give the customers better support where the customer
needs it.

Q: What plans do we have to work with CSOs to hire employees that are leaving
the company?

A: Each of our employees has the opportunity to work with Drake, Bean and
Moran, our outplacement firm, which does specific consulting on an individual
basis to match skills with those of perspective employers.  As it relates to
CSOs, Drake, Bean and Moran will be conducting 5 job fairs to allow the
meeting and potential placement of individuals with our CSOs.

Q: COD moved lots of people into the field positions.  Have the number of COD
participants been adversely affected?

A: COD employees have not been disproportionally impacted.

Q: We understand cost-cutting for the short term.  What are we doing for the
long term to save?

A: The downsizing of our population is just one aspect of the cost cutting
measures that are taking place across the Corporation.  We are also reducing
expenses across the board, examining investments in terms of their return,
reducing excess management, and re-examining the structures and effectiveness
of the organization to insure that we are competitively positioned for the
future.

Q: We have a set of core values.  Have they changed?

A: No.  We still believe in honesty and the customer comes first.

Q: If we do have more downsizing will the package be reduced in the future?

A: This is a decision that will be made based on conditions at the time.

Q: If I am a borderline performer should I start looking for another position?

A: Your manager is in a position to advise you on how you can improve your
performance and develop the skills that are required in today's marketplace.

Q: Are there plans for downsizing in other field and non-field organizations?

A: Work force planning is constantly being reviewed at Digital.  Downsizing
and restructuring is taking place in virtually every part of the company,
business by business, country by country.

Q: Will transitioning sales people be able to keep their company cars?

A: Yes, for four weeks, employees will be able to keep their cars while they
look to replace them or purchase their company cars through Fleet
Administration.

Q: Has this directly affected our EEO/AA numbers?

A: No, the review process took into account EEO and Affirmative Action.

Q: Does our financial package match what other companies are giving employees
in this industry?

A: Digital's offering has been considered by most as being more than fair and
equal to or better than what is being offered in the industry.

Q: Why did Digital wait so long to do this?

A: Digital has been in a re-shaping and restructuring mode for the past two to
three years.  Our first consideration is our people and our customers.  We
took the time we felt necessary to do right by them.

Q: Why isn't Digital offering early retirement?

A: Age was not a consideration in this process.  We were looking at the work
and the skills needed to get the job done.  If an individual is of retirement
age -- which is 55 years or older -- and would like to look at retirement,
they have that option.

Q: Are layoffs being used as a tool for controlling expenses?

A: The last thing we would like to do is release our most important asset --
our people.  Unfortunately, due to these economic times we found it necessary
to release some of our employees.

Q: Why weren't we given an opportunity to find other jobs in other
organizations?

A: We have made the decision that we would have a common announcement date for
each employee and that everyone would have equal treatment to look at
opportunities outside of the company.

Q: Was seniority a factor?

A: Criteria in this process was work needing to be done, skill set, and
performance.

Q: What percentage of the population was affected?

A: Ten percent of the population was affected.

Q: Will you selectively hire if someone special comes along?  Are we still
hiring?

A: At the present time, we are under a hiring freeze.

Q: Is this going on in Europe and GIA as well?

A: We are doing this on a business-by-business, country-by-country basis.
Downsizing is taking place throughout the company.

=====

Digital Internal Use Only
T.RTitleUserPersonal
Name
DateLines
1530.145% Layed OffHAAG::HAAGWed Jul 10 1991 22:0717
    re: .1
    
    So 10% of the field will be affected. Nonsense!
    
    I work in sales support and 45% of our group was layed off in the last
    coule of days. I'm not sure it's over yet. We now have 13 people left 
    in sales support to support a district office and all of DECs
    products - which are getting ever more numerious and
    complicated.
    
    I haven't been this depressed since I was informed I was being sent
    to Vietnam.
    
    Will the last one out turn out the lights. It seems we have decided to
    become a 8-9 billion dollar a year company. And in a hurry.
    
    Gene.
1530.2TRCO01::FINNEYKeep cool, but do not freezeThu Jul 11 1991 01:2614
    Great. Even with soft balls lobbed across the plate, the writers
    couldn't come up with honest answers in many places.
    
    But never mind that. Things are not good in this company. Organized chaos
    on its way to becoming disorganized, the head of the company seemingly
    cut off from the troops, etc. That's all bad enough.
    
    The very *least* I think that the management terrorists could do is just
    stop this god-awful euphemizing. "Downsizing" and "Outplacing",
    baloney.
    
    These people are being fired. 
    
    Scooter
1530.3RICKS::SHERMANECADSR::SHERMAN 225-5487, 223-3326Thu Jul 11 1991 10:013
    At least there is "official" word.  That seems to be an improvement.
    
    Steve
1530.4in re: euphemismsWHOS01::BOWERSDave Bowers @WHOThu Jul 11 1991 12:294
    I had always assumed that the use of plain English was strictly
    forbidden in some obscure chapter of the P&P manual ;^)
    
    -dave
1530.5COOKIE::LENNARDRush Limbaugh, I Luv Ya GuyThu Jul 11 1991 15:001
    .1, how many of the 45% were managers?   Just wonderin'........
1530.6My Manager Was AxedHAAG::HAAGThu Jul 11 1991 18:338
    re: .5
    
    22 people went out the door. 1 was a manager. My manager. It's just my
    opinion but he was the best manager in the building and perhaps even
    more important he cared for his people. I can't say that about many
    others. Every cube around me is now empty.
    
    Gene
1530.7Still going onSAHQ::STARIEI'd rather be skiing!Thu Jul 11 1991 18:422
    It's not over yet?  As I write this note, security is watching a young
    woman pack two asiles over from where I sit.
1530.8VMSSPT::NICHOLSIt ain't easy being greenThu Jul 11 1991 20:0124
    I understand there to be a difference between "Layoff" and "fire" and
    that is...
    
    a person is "laid off" as a result of business considerations. The
    position no longer exists.
    a person is "fired" for personal considerations. (malfeasance,
    misfeasance, criminal activity, sexual harassament etc)
    
    A automobile worker is "laid-off" when there is no work available.
    An automobile worker is "fired" for -say- being drunk on the job.
    
    A DCU executive would be "laid-off" (perhaps) if DIGITAL were to take
    over direct control of the Credit Union, or if the control were given
    to another entire organization.
    
    The same DCU executive would by "fired" if -say- she or he were
    pilfering funds or committing money to inappropriate activies.
    
    I think it is also the case that people who are "fired" for cause are
    NOT eligible for such things as unemployment assistance. Whereas people
    who are "laid-off" ARE eligible.
    
    
    				herb
1530.9There's 10%, and then there's 10%BSS::D_BANKSThu Jul 11 1991 21:5111
Re:                     <<< Note 1530.1 by HAAG::HAAG >>>

>    So 10% of the field will be affected. Nonsense!
>    
>    I work in sales support and 45% of our group was layed off...

It's always harder to see the big picture when your group is especially hard 
hit.  I'm sure the 45% of your group *really is* a part of the bigger 10%.  I 
don't think anyone said it would be 10% across the board...

-  David
1530.10Numbers vs NumbersSCAM::KRUSZEWSKIZ-28 IROC &amp; Roll in FLAThu Jul 11 1991 23:2812
    Numbers are always funny things, this comes from a Math major. The
    reports all indicate that "only" 800 people were laid off this week.
    Now that is not 10% of anything in this company. However in our
    Accounts Group the number let go is about 10%. 
    
    When I read about 45% of a group or people sitting amongest empty
    cubes, or 100's in Chicago or elsewhere, I wonder about numbers.
    
    Maybe in all averaged out at 800 US Sales and Support, with some groups
    not affected at all.
    
    Frank
1530.11The Numbers Wars Are OnHAAG::HAAGFri Jul 12 1991 00:3926
    re: the last few about numbers
    
    It seems our district was hit harder than most. We had our "survivors"
    meeting this PM and our sales DM said about 20% were let go throughout
    the district. It may average out to 10% around the country but it was a
    lot more here.
    
    I am an engineer by trade with much experience in multivendor
    networking, particularly DEC and IBM (which I worked with for 8 years).
    I am really interested how 10 (I was wrong about the number in .1)
    sales support people are going to handle supporting 45+ sales reps in
    this district.
    
    We took a real big hit on "corporate" accounts. That is, accounts in
    our geography but being supported some place else. I don't think any
    sales or support was bugeted for "local" accounts that have
    headquarters NOT in our geography. This topic is being drug to new
    levels in previous topic in this conference. Time will tell but this
    could be a real problem.
    
    BTW, accounts in this district that are headquartered in "other"
    goegraphies acounted for about 25% ($35 million) of last years revenue.
    When numbers, and only numbers, dominate your line of thinking, seldom
    does good things happen.
    
    Gene.
1530.12THEWAV::GASSNERFri Jul 12 1991 01:3837
The current downsizing effort is a direct result of poor management 
decisions made during the late 1980's when our product lines sold
like hotcakes.  In a fanatical growth environment, it's easy to promote
financial performance as if it were CAUSED entirely by the performer.
Similarly, when the economy breaks down, Americans have traditionally 
blamed the current President -- though we know the Federal Reserve has
far more control over the economy than the President.  Having promoted
mediocrity, we now must pay for our past excesses.  One cannot manage
an investment intensive business through accounting alone -- and expect
to succeed at understanding fundamental contributions to success.  
Anyone can manage during success -- so that is when we promoted 
mediocre financial managers to manage a technical business.

Field managers would make better decisions if they had any clue as
to what their employees DO for a living.  Isn't it time to reverse the
accounting trend and revert to the fundamentals of understanding WHAT
the market demands, and then providing it?  Success only follows 
satisfaction of market demands -- the cost cutting and downsizing 
events cannot substantially increase our profitability for very long.
Instead we must take a new look at our products and services, and 
continue to solve new problems in unique and interesting ways.

I, for one, have always worked to understand business AND technology
in the same breath.  Why not let go all the managers who cannot clearly
discuss the distinctions between CMP, SMP; a kernel, a layer and an 
application.  Whoever said you don't have to be technical to manage
a technical business?  

I suggest that when things are not working very well that we should begin
to question our fundamental assumptions and return to the fundamental 
strategies which made this a great corporation in the first place.

Creative freedom of expression; investing in a good idea; the power to
cut or avoid red tape.  The open door policy; the value of QUALITY
and HONESTY.

FWIW -- I've expressed my humble opinion.
1530.13Is my image a pipedream?THEWAV::GASSNERFri Jul 12 1991 01:435
Ok, ok -- I admit that I am younger than the corporation, and was never around
when the great fundamental values described above supposedly were present.
But I joined the company shortly after reading In Search of Excellence, 
and somebody at least convinced Tom Peters that Digital had some of those 
values...  -")
1530.14Let's not give 'em any ideasKYOA::MIANOJohn - NY Retail Banking Resource CntrFri Jul 12 1991 02:0414
RE:                     <<< Note 1530.12 by THEWAV::GASSNER >>>

>I, for one, have always worked to understand business AND technology
>in the same breath.  Why not let go all the managers who cannot clearly
>discuss the distinctions between CMP, SMP; a kernel, a layer and an 
>application.  Whoever said you don't have to be technical to manage
>a technical business?  

Because then someone might get the bright idea of trying to lay off all
the worker bees who do not understand the NAS architecture and who
do not know what its benefits for customers are. :^)

NAS == 10 * SAA
SAA == 5 * NAS
1530.15Was this a Q&A topic?THEWAV::GASSNERFri Jul 12 1991 04:048
    What proportion of the employees terminated were managers?  Were there
    any of our 100+ VPs included?  What steps can we take to increase the
    number of people working, while reducing the number of people who tell
    workers WHAT to do?  If a disproportionately low number of managers    
    terminated, then the over-advice problem could increase substantially, 
    resulting in makework instead of increased productivity.
    
    
1530.16They come last.DCC::HAGARTYEssen, Trinken und Shaggen...Fri Jul 12 1991 13:005
1530.17MADWT::MADWT::HENDERSONAnother Casualty of Applied MetaphysicsFri Jul 12 1991 20:3713
Rumor around here is that there will be a second (4th) round of involuntary 
separations in August primarily aimed at 1st and 2nd level managers. I hope
the aim is good.

Re: Terminology

Layoff also implies that if the work returns the the worker will be rehired.
This is the way it works in Union shops like GM. 

One sales rep here was planning to resign and asked personell what it would 
take to save a job. He was told he had to resign before June 21st because the
names were sent in on the 24th and after that date his resignation would only
create an empty slot.
1530.185 to 1 is hard but not impossibleSUBWAY::DILLARDSat Jul 13 1991 01:4710
    re .11
    
    When I started at Digital ('84) our district had a ratio of between 4
    and 5 sales reps per support person.  It was around '87 that there was
    a major push to move the ratio closer to 2 to 1.
    
    How did we manage?  Account control and planning were key.  Hard to
    respond to unplanned events with a 5 to 1 ratio.
    
    Peter Dillard
1530.19There are more resources for Sales.NEWVAX::MZARUDZKII am my own VAXMon Jul 15 1991 11:068
    
     Perhaps Sales can now lean on EIS PSS folks now, they ARE a viable
    resource, when available. This would promote a new personal network,
    stimulate knowledge on both sides and make all parties work together
    smarter.
    
    Thanks,
    Mike Z.
1530.20PSS resourcesLURE::CERLINGGod doesn't believe in atheistsMon Jul 15 1991 11:3815
re: .19

	Gee, that sounds like how it was done before sales support came along.
Not that it was a bad setup.  However, the way NMS works is that whether sales
uses Sales Support (aka System Sales Specialists in NMS-speak) or PSS, they get
`billed' for services rendered.  System Sales Specialists are supposed to
understand the account and sales issues better than PSS.

	I agree, PSS is a very valuable resource, and they are available for
sales support help, but they are not a free resource.  I am an SSS that came
from PSS many years ago.  I still depend on the expertise of the PSS people and
plan to continue using them whenever it makes sense.  But I have to make sure
that it also makes cents.

tgc
1530.21I miss spoke!SCAM::KRUSZEWSKIZ-28 IROC &amp; Roll in FLAMon Jul 15 1991 23:288
    Gee, thanks -1!
    
    For the past 14 days I have been telling people I was Sales Support, I
    forgot that I too got a new name in NMS - Systems Support Specialists.
    
    Thanks Agian,
    Frank 
    S.S.S.