Fraud and Conspiracy Theory

There is only one subject of conversation in the call-centre at the moment and that is the 20% cut in hours which has been imposed on all of us on the floor. People have been talking about how it will affect them; For a couple of people who have been doing 50+ hour weeks this means a huge cut in their monthly take-home, one colleague has also just agreed a sale on her flat and is in the process of arranging a new mortgage not to mention just about to go on maternity leave whilst someone else has shelved a plan to move out from home.  For most others, like me, the struggle to pay the bills has now got even harder. One person has already given their notice in, another looks set to follow tomorrow and I would be surprised if more do not make an exit.

What are the reasons for all this hardship? The Managing Director issued a statement which I was handed as I sat at my desk on Monday it reads as follows:

27th May 2011

Announcement

Over the past few months our clients have struggled to generate sales and activity to the levels forecast at the beginning of the year. This was seriously compounded in April because of the consolidated Bank Holidays and the Royal Wedding, which led our clients to forgo all advertising for most of the month. This was unprecedented and as a result we experienced one of our worst months on record. This seriously damaged the company’s cashflow position and forced the Directors to, once again, inject cash in to the business to ensure that supplier and salary payments could be met. Disappointingly, despite some improvement, this month has not seen the recovery we had hoped for and the next few months remain equally uncertain.

As a result and to safeguard the company’s position and indeed our own futures, we can no longer adopt a ‘wait and see’ approach and have decided to act immediately. Therefore, from 6th June until the end of August we will be introducing ‘short time working’, (reduced working hours), throughout the whole company, in an attempt to reduce our wage bill by approximately 20% per month, where practical to do so. In terms of your own personal income, this will equate to a reduction of around 12% – 14% although this will be confirmed to each of you individually in due course, along with your revised working hours.

Whilst painful for all of us, in what are already challenging times, this course of action is seen as the fairest and indeed only way, to make savings, without going down the painful path of making redundancies, especially as we view this as a relatively short-term measure.

As far as the future is concerned, we have no concerns. From September through to the end of the year we will, as is customary, see strong trading. In addition over the last 12 months we have repaid all of the significant debt incurred by the fraudulent actions of our ex-Financial Director and this will no longer burden us going forward. Furthermore, we are confident that additional business opportunities will present themselves, from new and existing clients and discussions are already underway in some cases. However, all of that is ahead of us and for now we have to “batten down the hatches” and save money wherever possible, whilst still servicing our clients and their customers to the best of our abilities.

Whilst we very much regret taking this action and understand the difficulties it will cause each and every one of us, we cannot account for the downturn in client fortunes and therefore have no other option, at this time, but to act accordingly for the long-term benefit of us all. We therefore hope that you can appreciate our position and can support the decision we have made.

Thank you

Steve-O

Managing Director

The back-story:

To fully understand the above statement I need to fill you all in on a little bit of the backstory. When I first started at the company towards the end of 2009 the big office was inhabited by a guy who for the purposes of this blog I’ll name Dave. Being new to the company I pursued a head down strategy so kept out of the line of sight of any management particularly Dave who I understood was the owner of the company. Dave seemed affable enough though there was talk of how often mistakes were made on payroll with things like overtime. A couple of months into my employment I was, at least I believed, overpaid by a not insignificant amount. I thought long and hard about this and reasoned that it would probably be snatched back from me next pay-day so I waited for a quiet moment and entered the office. Dave just laughed and offered a hugely perplexing explanation which I just couldn’t follow, but he assured me everything was fine. He told me that another person who started at the same time had come to him about the same thing “you must be very honest people” he said.

Not long after this conversation, in the New year, Dave disappeared. At first we thought he must be on holiday, but after a while we sensed something must be up. A man and woman in smart suits with laptops and briefcases were spending long periods of time in Dave’s office going through piles of papers, sometimes they were joined by a large physically imposing man in his 60s and would often be in conference around a small table at the front of the office.

Despite this all unfolding in front of us we were told nothing.  The culture of the firm also meant that no-one was brave enough to ask what was going on. A rumour began to circulate that Dave had had a breakdown and was off work with stress. Gradually over months a new story began to emerge; namely that Dave who had been the finance director was in the process of taking over the firm, from Big Al. Big Al had been enjoying his retirement when somehow he was alerted to the fact that Dave had been fleecing the company to the point where it was quite literally on the brink of collapse. This forced Big Al to ride back into town seize control of the company and shore everything up.

All this was over a year ago and still the full details have not and are never likely to emerge. We do not for instance know if the police had been called in, though I never saw any officers at the company during the time, just the pair who I assumed were auditors of some kind. In fact Steve-Os announcement has been the first time that the F-word has been officially mentioned. The only previous announcement was that Dave had left the business with immediate effect.

Bad management?

Given the background of intrigue surrounding the business maybe it’s not a surprise that a few details in Steve-Os statement trouble me. for instance if we were to wholly accept the version of events in the announcement then its fair to conclude that our present situation is the product of some shockingly bad management.

Firstly we were all given an inflationary pay-rise in January after an intensely busy Christmas period. This was, so the old hands remarked, the first pay-rise in five years so the business must have felt it could well afford this and as for the forecasted trading comparing my experiences this year and last year there has been little difference in the peaks and troughs. In fact only at the beginning of March Steve-O himself seemed less downbeat when he remarked in a post dated the 3rd of March on the company intranet:

After a steady, if somewhat, unspectacular start to the year, March is going to see a significant increase in activity from some of our key clients.

Client A’s Mother’s Day Campaign will launch in earnest around the middle of the month and inbound call and post traffic will increase massively and be sustained for a two to three week period, leading up to 3rd April. In addition, activity generated by the recent XXXXX product launches will start to impact upon us and this will probably be at the same time Client A hits!

It is true, as reported in previous posts, that April itself was a bad month, but as this seems to have been something Steve-O anticipated in that same memo when he remarked:

April however is going to be a strange month, with the various Easter, Royal Wedding and indeed, early May Bank holiday, having a significant and detrimental affect upon business. It might be good in terms of ‘day’s off,’ but none of our clients will advertise, in earnest, over this period, so we are likely to be extremely quiet, unless XXXXX activity surprises us.

You may have realised by now that if there is one thing Steve-O loves more than any other it is the ubiquitous use of  ‘air quotes.’ The strange thing is though that despite things quieting down several of the Christmas temps who had escaped the post-Christmas rush temp cull and made it into the new year were given permanent contracts something I remember mentioning to a colleague as this is pretty unusual. This meant that in our quiet month, which as we have seen Steve-O so rightly anticipated we were actually taking on new members of staff.

Another detail which deeply perplexes me is the line:

this course of action is seen as the fairest and indeed only way, to make savings, without going down the painful path of making redundancies, especially as we view this as a relatively short-term measure.

On the face of it this seems very nice but there is something strange; this is a business which has never hesitated to wield the axe where it’s felt it to be necessary in the past. The old hands will talk of numerous occasions, some relatively recent, where staff have been made redundant and I’ve myself witnessed the way temps have been tossed aside like used tissues the first time they take a minute too long on their break, or are perceived to be away from their desk too long; there were never any warnings instead they were coldly clinically despatched in a single phone call to their agency who would in turn pass on the message that their services were no longer required. I mean the biggest cull of temps always takes place, as it did this year, just before Christmas!

But, assuming the firm has suddenly found a moral compass what about the practical issues it now faces. As we have all (at least those of us doing a job) had our hours reduced by 20%, this issue becomes, as a colleague pointed out one of when do we all get them back. Who decides who gets their hours back when and what happens to the gaps left when people leave, is this spread evenly amongst us, or will some people find they get their hours back before others? In short the firm has placed itself in a bind for the next few months. I mean I certainly wouldn’t want to deal with the canteen animosity I would face if I was given extra hours before other people.

This wouldn’t be a problem if the work wasn’t there, but the most puzzling aspect of this is that things are busy, the calls pouring in. So far this week and last week I have had hardly any gaps between calls only briefly in the mid-afternoon lull, and not at all on Mondays. In fact it was only the other week that customers were getting angry they had a 20 minute wait to get through. I obviously don’t know the details about our contracts with clients, but I do know they get unhappy when calls are ‘dropped’ as this means in many cases a lost order and therefore lost revenue. I commented on this with our manager whilst working out my new hours “but it’s really busy” I said. Her response was that she just couldn’t find a way to make the cuts and keep the phones covered so I really can’t fathom it in which case I turn to….

The conspiracy theories:

One thing which isn’t mentioned in the announcement is any news of Big Al’s retirement. In line with usual company procedures this is not yet official knowledge, but I was among a group of people in the canteen who Big Al announced his imminent retirement to. I didn’t think too much of this at the time, but I heard a rumour recently that as Big Al wanted to sell the company and as no buyer was forthcoming then the company would be closed down.

Is it just co-incidental that the cut in hours has now come about? One person seems to think that the cut in hours is a first step to making us all redundant in a few months time, but another theory voiced by a friend of mine who works in business finance is that cutting the wage-bill by 20% will make it easier to raise the finance for anyone wishing to ‘take-over’ the firm.

Watch this space….