How We Avoided Layoffs When Layoffs Were Inevitable

The following is an excerpt from the just-released 10th anniversary edition of the seminal manufacturing leadership book Everybody Matters: The Extraordinary Power of Caring for Your People Like Family.

All through the mid to late 2000s, Barry-Wehmiller was growing rapidly and profitably. I was out having dialogues about our Guiding Principles of Leadership with people all over the country as well as in Europe. Every time we acquired a new company, I’d sit down with the people and talk about what we believed in and what they could look forward to now that they were part of the Barry-Wehmiller family.

I was feeling deeply grateful and blessed. Our culture was in harmony with who I wanted us to be. Everything in my life felt aligned. Then we were hit with the worst economic crisis of our lifetime: The Great Recession of 2008-2009. Many large financial institutions were on the brink of total collapse, national governments around the world had to bail out massive banks and stock markets were crashing everywhere. The housing market collapsed like a punctured balloon, and consumer wealth declined by trillions of dollars. By October 2009, the U.S. unemployment rate would reach 10.1%, roughly double the pre-crisis level.

Our company had been through plenty of tough times. But we had never dealt with the kind of external economic conditions that virtually every business now faced. The carnage ran wide and deep. In 2008, Citicorp laid off 73,000 people, Bank of America 35,000, General Motors 34,000, and Hewlett Packard 25,000. In November 2008 alone, employers eliminated 533,000 jobs, marking the largest single-month loss in 34 years.

A Wake-Up Call in Italy

At our January 2009 board meeting, our executive team felt that our backlog of orders and prospects coupled with our spare parts business was good enough to get us through without impacting our people. But the next month, while visiting our Italian operations, I received an email. PCMC, one of our largest divisions, had a major order put on hold. In fact, several customers were canceling or putting on hold existing large orders—orders against which they had already paid large nonrefundable deposits.

Our level of concern was rising, and the news from the economy was growing graver by the day. Financial liquidity had nearly dried up; borrowers and lenders were frozen in place. I sat in my hotel room in Italy and thought, “Oh my God, it’s going to hit us, and I don’t know how hard. What are we going to do?”

We couldn’t simply absorb the costs and run the risk of violating our banking covenants. Such a “head in the sand” approach to preserve the status quo could potentially destroy the company’s future.

We had to find a way to keep our financial results tolerable while keeping the pain to our people at a minimum. How could we deal with this crisis in a way that was consistent with our leadership vision?

 Before we had embraced our Guiding Principles of Leadership in 2002, if something like this had happened, we would have “rightsized” our organization with little hesitation, laying off people in the offices and plants. But now, it would render one of our guiding principles, “We measure success by the way we touch the lives of people,” hollow and essentially meaningless. If we let people go in that brutal economic environment, it would devastate them and their families and even some communities. There were simply no other jobs to be had.

What Would a Family Do?

I asked myself, “What would a caring family do when faced with such a crisis?” The answer came to me right away: All the family members would absorb some pain so that no member of the family had to experience unbearable pain. Everybody would pitch in with a sense of shared sacrifice and a shared destiny.

I started crafting ideas. I made a list of natural ways for all of us to take a little pain so that we didn’t hurt anyone too much. I thought, “What if we implemented a furlough and everyone took a month off without pay? We could also suspend the 401(k) match and do some other smaller things.”

I emailed my leadership team and asked them to get together and think about “how we can accomplish this in a thoughtful, caring way.”

In the couple of days it took me to return from Europe, they had reviewed the ideas and turned them into actionable plans. Team members throughout the organization would share the burden, even from divisions that weren’t badly affected. Everyone would take an average of four weeks of unpaid time off.

We suspended executive bonuses and the 401(k) match, put in place a reduction in travel expenses, and devised a generous Voluntary Transition Opportunity Program for associates who were close to retirement. I cut my salary from about $875,000 to $10,500 (which had been my starting salary in 1968 when I began my career at Price Waterhouse).

By the time I returned to St. Louis three days later, the team was ready. We sent out a video message to the entire organization so that I could communicate with them in as natural a way as possible about what we were planning.

The reaction was astounding—far better than we anticipated. People had been walking on eggshells for months fearing they might lose their jobs. It seemed like everybody around them was getting laid off: relatives, many of their friends, even their pastor. In an instant, the fear that had been spreading like a cancer was gone, replaced with positive feelings of safety, gratitude, and togetherness.

Because our executive team had clarity about our shared values and how to respond in accordance with those values, implementation throughout our global organization was quick and smooth. The furlough plan was rolled out within 10 days companywide.

Sticking to Our Values

Overall, we implemented almost $20 million in cost-saving initiatives and protected everybody’s livelihood. We kept our commitment to education and L3 continuous-improvement events.

We encouraged team members to use idle time to take classes in our university and used gaps in the production schedules to accomplish major lean improvement events. Team members found creative ways to make our recognition events meaningful without spending a lot of money on the celebrations.

The furlough plan affirmed to our team members that we indeed cared about them. They felt an overwhelming sense of relief that they could count on their job and income—and also that we were acting to preserve the future.

Morale rose dramatically, because people realized they didn’t need to worry about their jobs. Most were happy to offer up four weeks of income, knowing that it was not to make the company more profitable but to keep their colleagues from losing their jobs.

We told people, “Take the time off when it works best for you.” Some leaders initially said, “Oh, no, Bob, we have to tell them when they can take time off, because we need to make sure we have enough people to do the work.”

But I was adamant about this, saying, “Look, if we’re asking them to sacrifice, then we have to give them something in return. We’re going to give them the flexibility of when to do it, when it is best for them and their families. Just do what you would do if they got sick.”

Some relished being off in the summer with their school-age children; others used the time to do volunteer work. Some stepped forward and “took the time” for colleagues in more straitened financial circumstances who could not afford to lose four weeks’ pay. Still others needed coaxing to take time away, simply preferring to work through their unpaid time. We insisted that they take the time off and not do any company-related work while they were away.

We got through that economic downturn, and the cultural impact was profound. Who you are in the worst of times is not always who you are in the best of times. Your values, beliefs, and culture don’t really get tested when times are good.

Adapted from Everybody Matters by Bob Chapman and Raj Sisodia, in agreement with Optimism Press, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright © 2025 by Barry- Wehmiller Group, Inc. and Rajendra Sisodia, 2025.