Companies & Industries

A Former Hatchet Man: "No Matter What, You're the Bad Guy"


Bob Lambert had a knack for canning people. Although the former human resources executive loathed the task, major corporations turned to him for help in cutting their workforces when the economy turned bumpy in the late 1980s and early 1990s.

During a decade at PepsiCo Inc. (PEP) that ended in 1990, Lambert rose through the human resources ranks, finally ending up as human resources director for the soft-drink and snack-food giant's Western region. At PepsiCo, Lambert was often leaned on to downsize operations as the company gobbled up bottlers and other companies.

SWINGING THE AX. From PepsiCo, Lambert hopped to Stride Rite Corp. (SRR), a maker of shoes including Keds and Sperry Top-Sider, where as chief human resources officer, he was again pressed into presiding over layoffs. After three years at Stride Rite, struggling department-store operator Carter Hawley Hale came knocking. At Carter Hawley, swinging the ax was again part of Lambert's job as he helped restructure the company.

Nowadays, Lambert, 47, finds jobs for people instead of taking them away as managing director of Southern California for executive-search firm Christian & Timbers. But he recently talked with BusinessWeek Online writer Eric Wahlgren about his experience laying off employees at a PepsiCo bottling facility in the late 1980s. Here's an account of one day in the life of a former hatchet man as relayed to BusinessWeek Online:

In the late 1980s, we decided we were going to shut down a bottling plant we'd acquired in Northern California. It was redundant. We didn't need it. There were about 300 employees. They ranged from managers all the way down to line workers. I was involved in the acquisition, so I knew this was going to happen from the very, very beginning. If managers doing this kind of thing haven't been adequately trained and prepped, then they'd better demand it. This is not something you do on the spur of the moment. There are laws that have to be adhered to. With a large facility, you've got 60-day notification requirements [under the 1989 Worker Adjustment Retraining & Notification (WARN) Act].

THE BAD GUY. I didn't sleep the night before I had to tell people. I mean, no matter what, you're the bad guy. You come to that day where you have to sit down across the table from somebody and tell them they're losing their job, and it's not easy.

The way I prepared myself was by knowing I had done everything humanly possible to make this as smooth a transition as I could. When an employee came in, I didn't beat around the bush. I just said: "Come on in. You know we've been talking about what's been going on for some time. And the reason I want to talk with you today is because your job is one of the ones being eliminated."

One of the hardest things about this is that I was sitting across from people who hadn't done anything wrong. They'd been hardworking and loyal employees. It's different than terminating an employee who has been consistently warned over a period of six months and who has been given every chance.

SCRIPTING IT OUT. I told the employees when their jobs were going to end, and I said I was sorry to be the one to break the news. But I also said I wanted to talk about what we'd prepared to help ease the burden -- to make this as easy as possible. About 99% of the companies will have scripted this out for people. That's important. Usually, you'll have the human resources manager meet with the employee, too. You just don't let the employee leave the building, and then that's it. You have meetings scheduled with career counselors.

The overriding thing is you have to be empathetic. You have to put yourself in their shoes. And it's hard. Some people, I think, might choose to avoid the gory details. But I knew how many kids they had.

Another thing I felt bad about was that they were going to have to pick up the phone and call their spouses and tell them. We counseled them on that. I said things like, "Look, we're paying you through X date. You have benefits coverage guaranteed to you. So, in the near term, nothing's going to change." What I really tried to do was get them to focus on the future. And I got them in front of people right away who could help them assess their skills.

YELLING AND SCREAMING. You have to prepare for situations when people get really upset. I've been involved in some situations where we had security alerted. You hope it doesn't happen. It didn't happen this time at Pepsi. But I've had people yell at me and scream at me and throw things. That's O.K. Every human being is different. And you don't know what they're carrying around with them. You've just got to be smart about it.

I'm happy to say I've had far more instances where people almost felt more sorry for me that I had to do this. A lot of the media attention right now is on people who have been at dot-coms for the last 12 to 18 months. It was high-risk going in. This is pretty different. The things I've been talking about involve people who'd been employed for years by Fortune 100 companies.

Pepsi was wonderful. We worked very closely with the local community. We found out what government or local funds were available for job retraining. We worked with local employers to place people. We put together resume books. And we did everything possible to help these people find jobs. Obviously, the severed employees got compensation. There's health-benefits continuation under COBRA [the Consolidated Omnibus Budget & Reconciliation Act applies to companies with 20 or more employees and extends health-insurance coverage for 18 months for employees who lose their jobs].

RALLYING THE TROOPS. It's also important to remember the employees who aren't being laid off. You don't want a situation where people feel like the other shoe is going to drop. I used to work with a human resources guy who would take people to lunch every time he had to fire somebody. After a while, nobody wanted to go to lunch with him. So the message is, you want to communicate openly. To the workers who remain, you want to say: "This is why [the layoffs] happened. Let's focus on the future. You're the team. Here's what we have to do. This is your new role. And let's move on."

I tried not to take the stress home. Personally, I'm great at compartmentalization. Before I was at Pepsi, I was a naval aviator. I flew bombers -- A-6E Intruders. You learn how to compartmentalize. Basically, I was able to tell myself that I did it right. I felt I did it with humanity and sensitivity.

One of the people I had to terminate at Pepsi was a pretty senior manager in the plant. I knew he had been a Navy SEAL. He could be a pretty scary guy. And I was pretty worried the day we had to have that meeting. He kind of flew off the handle. He went through anger, denial, and all that.

He came to see me the next day. And I remember calling security because you have to be careful. Nowadays, people go postal, right? He came in, and he gave me this big hug. I was shocked. He said: "You know, I thought about you last night, and I wouldn't have wanted to be in your shoes." We had this great talk. By Eric Wahlgren in New York


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