03-22-2020, 05:15 PM
I too have been in that situation, except we were in a worse situation. The founders took a 100% pay cut. Top management took a 50% pay cut. Everybody else took a 25% pay cut. No layoffs. This was not due to a general recession, but a big drop in demand in our market. If I had it to do over again, we would do layoffs instead of the 25% cut. The problem is that many people can't live on 75% of their pay and must find a new job, period. Many who could survive it but have ambition and marketable skills decide that now is the time to look. The remainder are generally the guys who were not really the ones we preferred to keep, given a choice. There were jobs to be had in the market, so we lost a lot of talent that would have stayed had we just had a layoff. We bounced back within a year, but the personnel loss was both painful and definitely harmful. It would have been for better for the company if the management had decided who to retain rather than letting them self select. In this, Jack Welch was right.