Facing Financial Struggles: How Should I Communicate Job Changes to My Team?

I run a small pharmaceutical marketing company and have been experiencing losses for some time now. I have decided to halt our marketing activities. This decision was communicated to my team during a meeting where I instructed them to explore alternative options. I am committed to providing all financial benefits owed to them, including salaries, gratuity, and any other entitlements as per the applicable laws. The appointment letters of my employees stipulate a one-month notice period.

Query on Employee Communication During Financial Constraints

My query is whether I should request resignations and settle their accounts or issue termination letters due to financial constraints. I seek guidance on effectively communicating this decision to my employees in a considerate manner. Kindly advise on the appropriate written communication for this situation.

Thank you

It's really sad to know this situation. But I am happy to hear your perspective. I am not sure of the reasons as to how you reached here, but without blaming a particular identity, one of the best things I found that you have done is that you have discussed this in a public meeting. If you are true and conditions are really as such, then your employees will surely try to understand (but it will depend on the mode it was delivered).

Generally, in this situation, all get frustrated, minds full of questions, etc. One better suggestion to you will be to try to get in touch with your known employers, companies of the same field, and ask them to hire your employees. This will let you gain the trust of your employees and have positive thinking about you. You can also help them in getting their resumes forwarded to other employers or have their interviews conducted at some better companies.

The only ethical and moral thing is that the "United we stand" concept should be followed. If you follow the legal or formal ways, then both sides will have their say, and the final conclusion will be a dispute, loss of faith, and the loss of trust you have built over the years. You know it takes years to build trust and less than seconds to break. Many times it also happens that competitors try to malign your reputation in various ways.

So looking over the current scenario, I would suggest you the following:

Steps to Handle the Situation

First, try to grab the leaders/influencers of the departments: have a proper meeting with them and tell them your situation honestly, but do promise them some time you require to settle their account. Ask them to formally resign and be in touch with them regarding the settlement of their account. You can see what best you can help them with and get their life and your brand identity saved well.

Many businesses move in a dormant stage for a while as the business cycle does affect every business, and it's an undeniable fact.

Then you need to ask them to convince their teams and tell them that you will be settling their account in a period of time as the ways like termination, retrenchment (you can check your performers and non-performers and judge accordingly), etc., may work out for you for a while.

Hope my suggestions would work for you. I wish you success.

Regards,
Arvi