2 companies I know and have dealt with are going through a crisis. For obvious reasons their names are held back.

Both these organisations are very aggressively run and run by the founder himself. Both the founders are about 50 years of age and have created a good name for themselves. Most of the employee wealth creation has happened because of ESOPs and not because the salaries are high. Not that the salaries are bad, but they are not high.

Like all typical Indian companies both the managements treated the top (say 3) layers decently and below that the people were treated like cattle. Or let us say like commodities. However all of them were told – we are like family, we will help you when the chips are down…blah blah blah HR / PR talk that employees bought.

Then came 2008 and the chips were down. Now the 3rd layer (from top) was asked to reduce their ‘team’ size. Of course one of the senior persons who treated me to lunch said ‘Subra if I do not sack, I will be sacked by my boss’. Point taken. It was his guilt feeling perhaps that he was justifying the sacking. I am not even a shareholder, just a friend who did not want to pay for lunch in a shamelessly expensive place that is all.

Alas! the crying, screaming, howling of the employees below the 3rd level fell on deaf ears. Sacking happened.

Then came 2009, market climbed up. Nobody was prepared for the quick recovery. Forget the retail investors, even the big bosses in the financial service industry were not expecting it at all. People are leaving both organisations in droves. A new type of ‘head hunting’ has happened. Typically the potential employer says:

‘Mr. A we are happy to take you on a salary of Rs. 60 lakhs – a significant 20% jump in salary, and a signing on bonus of Rs. 20 lakhs HOWEVER you need to bring 12 members of your team’.

and team leaders are taking their people along. Like the Pied Piper of Hamlyn the teams are following. Numbers may change, but one question which the team leaders are finding difficult to answer is:

“last time when the sacking happened you said you were helpless, with what face are you asking me to stay on?”

Team leaders, vice-presidents (junior, senior, assistant, executive – all varieties) – are not owners, correct?

Both these organisations are being touted as good buys, I have no clue. At this stage I do not even want to say in which field they are operating. Only thing I can tell you is these are 2 companies, in 2 different sectors 🙂