Sunday, September 10, 2006

RadioShack Adds Insult to Injury


One can only wonder how bad it is to be working these days at RadioShack headquarters in Forth Worth, Texas.


On August 30, the company notified about 400 workers that they were being dismissed immediately as part of planned job cuts.

So what’s the big deal? Companies lay off hundreds – even thousands – of employees all the time.

RadioShack, in what has to be one of the biggest communications blunders of all time, told the employees they were fired by “e-mail.” You read that right, “pink slip e-mails.”

The action follows an announcement earlier in the month in which the company said it would eliminate jobs, mostly at headquarters, to cut expenses and improve its long-term position in the marketplace.

Already, RadioShack has closed nearly 500 stores, consolidated distribution centers and liquidated slow-moving merchandise to shake out of a sales slump.

If you’ve been following the news, you’ll recognize this as the same company that fired its CEO, David Edmondson, six months ago for fabricating part of his resume.

When news first broke of the latest fiasco, Derrick D’Souza, a management professor at the University of North Texas, was quoted in an Associated Press story as saying “he had never heard of such a large number of terminated employees being notified electronically.”

“If I put myself in their shoes, I’d say, ‘Didn’t they have a few minutes to tell me.’ “ He added that the move could be seen as “dehumanizing” to employees.

That has to be the understatement of the year.

Having spent more than 30 years in the business of public relations, strategic communications and crisis management, this goes down in my book as the most insensitive, callous, reprehensible misguided use of management power I’ve ever heard of.

Granted, new communications mediums have permeated all our lives. We search for jobs online, apply for them via e-mail, use company Intranets to change benefits packages, manage company pension portfolios, and use the Internet to work from home and the road.

But are we to assume that the normal progression of the medium is to fire employees by e-mail?

Long-standing research indicates that in any layoff situation the most important audience is the remaining employees. How a company dismisses employees directly impacts the future job performance and productivity of those who remain.

The Corporate Learning Institute, a team building organization that works with large for-profit companies, says, “Many companies are finding it necessary to restructure and this can have a negative impact on employee morale. Confusion and uncertainty among the people in any company will lead to low efficiency and productivity, dragging the entire organization down.”

With its ranks shrinking, RadioShack may have felt it did not have the human resources bandwidth to individually speak to each fired worker. Surely, no senior manager with even an ounce of heart could have thought this “e-mail pink slip” was a good idea.

There were certainly ways around it. The firm could have hired an outplacement firm to help. It could have spoken to employees in groups. It could have staggered the dismissals.

The hard work (preparing the severance packages and required termination documentation) was already done. It couldn’t have taken more than a few hours of time to speak to the employees in person.

Now, the company has poisoned the well. Morale at headquarters is likely to sink to a new low. Poor attitudes could easily penetrate to the retail level. Moving forward, recruiting good people is likely to be next to impossible.

This action cuts at such a raw nerve that I wouldn’t be surprised if some consumers boycott the stores.

Eventually, this uproar will fade from the news. RadioShack will trudge on, trying to turn things around as best it can. It will be interesting to see how this publicly traded company performs in the near and long term. No matter what happens, this company gets top billing in the communications hall of shame.

I’ll make one wager: if further cuts are needed, it won’t be done by e-mail.

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