"The company, which has 350 employees, has seen its sales increase 30 percent over the past year, Linkner said, but he hopes the cuts will fend off problems so the company can remain competitive."
Sales are increasing 30% and you have too much talent?
How did so many extra people get hired?
What new technology has increased firm productivity enough to cope with such rapid growth and make the current labor force redundant?
"Many of ePrize's clients -- from the automakers to financial services companies to retailers -- are seeing profits dwindle or disappear, leaving fewer dollars to invest in advertising."
The firms that hire ePrize are cutting spending?
How is the firm growing at 30% in the throws of a recession?
Fewer dollars for advertising and promotions?
"The laid-off workers received a severance package, though the company wouldn't disclose details. There are no plans for more layoffs, Linkner said."
Severance packages are good for the people let go. These are smart and talented folks.
No firm ever plans for more layoffs down the road. Cut once and cut deep. It seems that ePrize had a major RIF [Reduction in Force] last Summer.
Two rounds of job cuts in less than one year is a signal of concern
There are no easy answers
In the past several weeks there was elevated traffic for search terms such as "eprize layoff". The increase was so dramatic, it indicated that the word on the street was that something was happening. Sure enough, the Detroit News reported ePrize layoffs in today's online edition.
Michigan Economic Conditions
Michigan is facing some very turbulent economic conditions. In October the Michigan unemployment rate was reported as 9.3 percent, seasonally adjusted, tied with Rhode Island for worst in the nation. The automotive sector, which makes up a large segment of the Michigan economy is likely to continue deteriorating.
Your constructive comments and criticisms are welcome
Why would a firm need to do such a thing and why would it make it public? The people fired are damaged goods since ePrize publicized that they were terminated for poor performance.
From Crain's Detroit Business:
"Pleasant Ridge-based ePrize Inc. fired nearly 20 “underperforming” staffers on Tuesday, the company’s founder said.
A couple positions were eliminated in a streamlining effort, but ePrize President and CEO Josh Linkner said the remainder of the terminations were not layoffs but terminations based on job performance." What are the possible problems? Below are four possibilities.
Improperly Hired
Poorly Trained
Poorly Managed
Business Pullback [Result: Layoffs]
Lets take them one at a time.
Improperly Hired EPrize is a relatively young firm. It was founded in 1999. It is possible that their training systems have not developed as the firm has grown in the nine or so years since ePrize was established. HR and hiring managers may have made imprudent choices during the years of rapid growth and quick hiring.
Poorly Trained It is possible that the managers have a heavy load since ePrize may be operating much like a start up firm. In the rush to "make the numbers" it is likely that something had to give. As the saying goes, "what gets measured is what gets done" and that training had weak measurement metrics. Certainly sales growth and profit numbers were much more closely monitored. Since this was likely, managers focused intensely on revenue and profit metrics. Training and mentoring fell by the wayside. Growing firms need strong bench talent and the best way to get it to hire quality individuals and to have strong mentor/training relationships throughout the firm.
Poorly Managed Some of the same problems that were pointed out above also apply here. Managers zero in on the areas where executives indicate focus needs to be [revenue, profits, growth targets]. Less time and energy was spent on managing and developing people to grow into their current positions and to prepare them for future opportunities [Bench Talent Development].
Business Pullback It is not a secret that the US economy has been facing challenging circumstances for the first half of the year. Recession or not, there are a lot of headwinds. High fuel and food prices are sapping the spending power of consumers. When people have less money to spend and a sense of pessimism the velocity of money slows. Inflation affects consumers, manufacturers and the retailers that are in the middle. Home prices have also fallen precipitously and Consumer sentiment is very low at 56.6.
Economic Challenges As consumers become resistant to discretionary spending, many products and services see sales decline or stagnate after continued year over year growth. Firms begin to see margins tighten and profits to decline. Stock prices fall as future earnings expectations fall. At some point shareholders will implicitly demand that management make changes to "get results." Management will make changes on costs and expenses that they can control. Firms will cut back on marketing and advertising budgets as business slows. Competing firms will likely do the same. Firms like ePrize will see less business as their clients devote fewer resources to the kinds of promotions they specialize in. All of this will lead to ePrize reducing staff as business falls.
What happened with ePrize?
When a firm fires people they seek to replace them with more talented and capable people. Did ePrize fire or lay people off? The jury is still out, as of right now there are no new job postings coming through on job search engine Indeed.com for ePrize [See data below]. According to the ePrize Twitter page jobs have been posted here.
Of the jobs below, two of the jobs are at ePrize, the other two are not. As of right now there are no clear indications that the folks who are no longer at ePrize are being replaced. If new posting are clearly posted [with dates and specifics] that may indict people were indeed terminated.
As of right now it appears that there may be a slowdown and that these folks were laid off and not fired.
Maintaining laptops, software, printers and other technology. Must have network knowledge to be our hands on person for network connectivity in the office. To... From NewYorkJobs.com - 25 days ago - save job - block - email - more...
the continued growth of ePrize, the growth of our... Subway. ePrize has earned numerous awards, including the number-six ranking among the PROMO 100. ePrize's... From Advertising Age - 21 days ago - save job - block - email - more...
Resources Generalist for ePrize in Pleasant Ridge, MI... Subway. ePrize has earned numerous awards, including the number-six ranking among the PROMO 100. ePrize's... From HotJobs - 25 days ago - save job - block - email - more...
Accolo - Detroit, MIResources Generalist for ePrize in Pleasant Ridge, MI... Subway. ePrize has earned numerous awards, including the number-six ranking among the PROMO 100. ePrize's... From Monster - 26 days ago - save job - block - email - more...
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