In early 2003, I found myself out of work. And though the layoff didn't come as a complete surprise, it's not always easy to anticipate how things will turn out and how you'll react when faced with that situation.
I was a casualty of a public company buyout of a private company. I was CIO, so I knew I would eventually go away once the technology integration of our two companies was at a stable point. I did not anticipate the exact timing, however, because the public company wiped out too much of the management team in an initial cost-cutting effort to show a quicker ROI on the purchase. A failed PeopleSoft implementation also hurt them tremendously, since they couldn't generate invoices for three weeks. Can you say "cash flow problem"? The end result was that the buyer paid too much money, in both cash and company stock, for my company, and they mishandled the management of the organization because they weren't familiar enough with the segment of the industry they were entering. They thought they knew enough but did not.
Not leaving the management staff in place that did understand the industry segment resulted in a quick decline in sales. This resulted in several rounds of layoffs, some of which were too deep and too quick, causing an ever downward spiraling sales cycle and stock price (from $25 to $3 in less than a year). I was bound to go, and I knew it would come; I just wasn't sure of the exact day.
The final nail in the coffin appeared when the new IT management structure was sent out to everyone in advance of the newest restructuring. My name was not on it at all. Everyone in my department jokingly talked about it, and even more so after I asked for and received an interesting tap dance of a response. I knew why I was being let go: ever-increasing losses in addition to my continued heavy resistance to rolling out PeopleSoft in my organization (now a division), especially after having had a successful J.D. Edwards implementation. This was all before PeopleSoft bought J.D. Edwards in a failed attempt to stave off Oracle's acquisition.
Anyway, my severance package was a joke and not even close to the one negotiated during the acquisition. They timed it three weeks before my stock options in the public company converted to stock. But that didn't matter anyway; the options were at US$18 and the stock was at US$3.25, so they weren't worth the paper it would take to print them. The stock price is currently hovering around US$5.50 and has a positive EBITDA on the way to being cash-flow-positive -- this after the company wrote off more than half the purchase of the private company and fired the entire senior management team of the acquiring public company, including my counterpart in IT because of the PeopleSoft implementation failure (US$7 million over budget, which was twice the initial estimate of the entire project, and two and a half years late). They still haven't pushed PeopleSoft into the acquired company because no one there wants it; it would require too much customization at too high a price and give them only 70% of current functionality.
My wife and I had planned for the worst and kept several months' salary available. We also knew we could live paycheck to paycheck on either one of our salaries without having to draw on our savings. My wife is part owner of a family CPA firm, so we were also fairly confident that her position wouldn't go anywhere without much advance notice.
I took the summer off to avoid paying child care fees and spent my time taking my kids to amusement parks, the zoo and the children's museum around my hometown. I didn't anticipate the challenges of finding an equivalent position in my hometown. It's a fairly large metropolitan area with many large and medium-size companies, but no one was hiring at the time -- and I mean no one. Moving was out of the question because of the family business my wife was a part of, so I stayed unemployed for a while. After my unemployment ran out, I started my own company and added a few customers fairly quickly. This resulted in some nice additional income to pay for my children's Catholic school tuition, which we refused to give up.
When my wife and I look back on the event, we can recognize how very stressful it was during the time leading up to the layoff. No one likes to be thought of as not necessary. Every employee strives to become an indispensible member of a company -- and every company strives to ensure that no one is indispensible. After all, the graveyard is full of indispensible people. It made me question my own self worth and what I had done with my life. Since many of us define ourselves by our jobs, it's hard to accept the notion that we're not needed. The summer break helped me a lot and allowed me to get closer to my children, and I would definitely choose to repeat that scenario without hesitation. I refuse to go to my grave saying I wish I'd spent more time with my children.
I eventually ended up merging my company with another. One year later, I am generating revenue and helping to make decisions on the future of the company. I travel more often now for work, but that comes in spurts and will become less frequent as the company continues to grow. But most important, I enjoy my current state in life, both at home and at work.
Seiter is director of the ITIL services division at Conexio in Cincinnati.