Best way to have HR layoff

Business Owner

I’m not technically a formal manager as I’m the CFO of the company, but SG&A climbed to an extreme as a certain person mass hired without permission.

I need to fire 12-16 of them as they shouldn’t have been working for this business unit at all.

I’ve considered deferring my bonus to keep them but what would you all do? I’ve always strived to have zero firings that weren’t the other person’s fault (such as embezzlement or faking work).

I just can’t see a 700k burn on my P&L and honestly think the main fire should be the manager who assume they have authority to do these things, but again I’m big on salvaging the relationship.

I’m clearly torn and figure managers would be the perfect group to ask.

Final edit: Managers of Reddit (you) were my attempt at a 3rd party benchmark for preliminary optics. To show it is worth deferring and see how management feels was the key.

The results seem focusing on my title and not the nuance. This didn’t provide the results I hoped for. This was never about at me and I appreciate those who participated. The issue is genuine and the few attempts to assist means so much. Mods can feel free to close this.

Attn to the dude blaming the COO. You’re straight wrong… We have duties when we are appointed. He has about a 30% crossover with finance, but he’s not hiring people or responsible for someone sneaking people in. You cite you’re fortune 10, but officer liability is certainly something you avoid for now. It might be a thing in your workplace but isn’t universal..

Like embezzlement or fraud, the person at fault is obvious as the person who hired people and violated the SOP he signed.

Edit 2: the reason W2 is important is people can sign up for health insurance and much more. They could have accrued PTO that must be paid. Since this is not all 1099 I cannot impulse fire. Court is not the advice I want.

in managersby DramaticAd5956

52%

16d

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DramaticAd5956

16d

I’m not HR and don’t do firings. This issue just happens to be a issue that came to me. I’ve told HR we have a hiring freeze in the interim.

I’ve never claimed I have some heart of gold. I wanted nuance from people like yourself, but it’s now wasting time.

My teams have great performance metrics, so no I do not want to part with them. Some have been with me for over 7 years. I value loyalty and have been lucky to have them.

Yes, deferring my bonus would allocate the funds. I’m trying to be a good person as I have many forms of comp. (I’m sure you’re surrounded by CFOs who aren’t this way, but deferring a bonus isn’t a big deal… I just get it at a later time. Equity value, salary and everything else doesn’t make me suffer..)

The rest of the c-suite will agree to whatever I recommend. It’s like a marriage tbh and we all are very close. I’m busy integrating a recent acquisition with profit issuance from Europe. The billed hours are climbing, so it’s just not worth bringing to them. I figured a collective number of people on Reddit would be helpful.

The remainder of C-Suite are busy with their roles full stop. I don’t really want to bother them over something I’m still working out mentally. Not to mention we aren’t on the same continent at the moment.

They easily will tell me to mass fire. I don’t need to ask

I’m in charge of treasury, reporting, IR, budgets, lender presentations etc. Firing isn’t my job and idk what sniff test you need.

Immediate next steps and the remainder are silly because I just saw the month-end close metrics at 3am. You’re assuming I’ve had any time to consider options. I wouldn’t ask Reddit if immediate action wasn’t going to be addressed. All I could do is fire HR (at least the outsourced segment).

gamay_noir

Seasoned Manager

16d

"It’s like a marriage tbh and we all are very close."

When I worked for a c suite with this dynamic they were pleasant to be around but consistently failed to productively have hard conversations (while publicly congratulating themselves for attempting the conversation), contributing to the company's demise several years later. Again, in startup / R&D tech and engineering so possibly very different from whatever you do. At this point I'm more confident going to work for executive leadership who are all business during work hours and disagree sharply in front of their directors.

Anyways, generally speaking, the optics of firing that whole group and their manager... what's the narrative that isn't "Barbara's great so we let her hire 15 people, but now we're realizing they cost a lot." Because that's a terrible narrative, and even if you fire Barbara how did that dynamic emerge in the first place? Astute middle and senior management always keep their ear to the ground for politics and this stinks of favoritism or something. Directors and such worried about bad politics, nepotism, capricious c suites, etc are not focusing on their work and may be polishing their resumes.

Also generally speaking, it these people legitimately should not have been hired, there's no reason to keep them. If there's a reason to keep them or a role or revenue stream for them to grow, maybe that manager is onto something and just needs coaching RE: aligning their strategic vision with the company's?

DramaticAd5956

-5

16d

We have worked in tandem for over a decade and grew into an international company. I took so much pride in the first 50 hires because you finally get the form of “large employer”.

We all work the top floor together and have a great relationship, even was my best man. So ngl bit offensive when I’m explicitly telling you that I am seeking advice from randoms intentionally. I’m not sure why you would think I don’t disagree with our directors. I assume marketing probably hates me at this point but I always expect justified expenses.

So, I’ve only learned of this within a short period of time since I’m doing an M&A thing out of country and read my accounting teams month end close to catch up on emails. I have not put much thought into it and am just seeking advice. No need to be rude. The entire point is to seek a wide range of opinions.

You’re focused on optics. I know every business units goals and benchmark data constantly. The answer is “maybe” it adds value, but the time it takes for them to learn and expectations for Q2 make me doubt the feasibility.

For the final thing of rest of c suite. I’m not in the same nation at the moment as they are. They might be awake now, but I’m unsure. So let’s stop focusing on the rest of the c suite and I said it’s like marriage because there is the split of equity, power and more that I’m just wasting time explaining. It’s odd that you would think we don’t go against each other just because I want to enter that convo with more insight and it’s very early for them.

craa141

16d

You are hearing skepticism as your overall message doesn't make sense or if exactly true, the path is obvious. You can either afford these new people or not. Don't put your entire company in jeopardy over this.

Your bonus has nothing to do with it. I am sorry but it doesn't. Deferring it may help your cash flow but doesn't fix that it needs to be paid. As CFO I am sure you realize that moving it from one period to another still means overall it gets paid.

A manager hired about 15 people without authorization, they need to be the first to go.

Then enough of the team to fix the financial issue. If that means 3 people great. If that means 14 then great.

It is just odd for a CFO to ask these types of questions but you did so that is my take.

DramaticAd5956

-8

16d

It’s due to a cash covenant and I’m funding the M&A with my own cashflow. Deferring absolutely makes sense with outstanding AR.

Timing is a major factor. Ever hear of a net-30? Or wonder why your W2 is processed bi-weekly? There actually reasons for all these actions.

Downvotes show that people have no idea the duties of my job. Cashflow and timing are key. Banks have covenants if you want to use leverage (debt).

I avoid it at all costs and deferring my bonus was just to give them a chance without having to fight the rest of leadership.

AR is simply money people owe me (the company) known as accounts receivable.