A small boutique wealth management company has been hammered by a slowing economy in the current climate. Revenue is down, cash flow is dwindling and lines of credit are nearly exhausted. The company is bleeding money, despite some government support. The founder and CEO is trying to ride out the storm, but the situation has deteriorated enough that they must do something to stop the financial haemorrhaging.
The option that would reap the greatest savings for the struggling company is to lay off some of his longest-tenured employees (each of whom contributed to the company’s prosperity in better times) because they cost the most in salary and benefits. But given his company’s precarious finances, he would be in no position to offer these workers any meaningful severance beyond two weeks salary.
What would you do?
- What ethical considerations would you give to your decision-making?
We encourage you to post your answers in the comments so we can create a healthy discussion, with the aim of learning from our peers, becoming aware of differing perspectives and challenging our own biases.
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Photo by Joshua Davis on Unsplash
This article has been updated to reflect the impact of Covid-19 on financial services. It first appeared on The BFSO website on 7 June 2019 and featured a boutique insurance company as facing this the dilemma.