Business scenario question - What appears to be going on?

[slow99]

From the original post, sounds like a PE LBO (maybe vc) is in this. They'll trim all the fat, sounds like fat-trimming is happening.

[Bringit]

Without knowing too many specifics, I would want to know what kind of infrastructure the "small" company was dealing with. Obviously if you are on the IT side of the business, you know whats involved.

I am in in the consulting business myself, and represent EMC on the storage side for enterprise level servers. I would say that close 70% of the solutions that I offer, are positioned as ways to not only manage the data and save energy, but more importantly cut the staffing needed to manage said data. (Saving the company from paying the salares)

I would all but guarantee, that the 3rd party vendor rolled out a solution, that could basically manage the data better than the 8-10 employees could. Typically what happens in this case, is the CIO gets butthurt because the CEO/CFO sees a value in this technology play, and wants to "relieve" these 8-10 IT employees of thier duties. In turn, creating a conflict between the CIO, and CEO/CFO. Sometimes, the CIO can hang on, and adapt, but most times it creates such a conflict that they either leave on thier own accord, or are fired. I've seen it hundreds of times.

Typically, when I'm building a relationship with a company, I start with the CFO/CEO. I spend most of my time working with the CIO, and IT emplyees, but I know that in the end, it will be the CEO/CFO making the final decision. and like posted above...typically a CIO comes and goes. Its a constant rotating door.

[2165 Turbo Rail]

This is exactly what happen at my company and hey I was laid off after 12 years. My division got sold off to another home care company and that company didn't need corporate staff because they already had enough in their NJ office

[46Tbird]

Eventually the CIO was terminated... [and] ... there were as many as 10 tech-staff people terminated

To me, this sounds like cleaning house to prepare a company for sale or secure new financing. Reducing the financial obligations of payroll, benefits, retirement, etc is a quick and dirty way to make the numbers look better to a potential buyer / investor.

[turbostang]

To me, this sounds like cleaning house to prepare a company for sale or secure new financing. Reducing the financial obligations of payroll, benefits, retirement, etc is a quick and dirty way to make the numbers look better to a potential buyer / investor.

Well, There's some behind the scenes info that's not there - some of those terminations were self inflicted. Others were contractors who came and went, some were replaced, but others weren't.

They got in a BIG rush for a short period, and it seemed once that demand was met, they really started looking closer at who was doing what, and if they were really 'needed'.

[abecx]

Very simple, they are converting the company to be profitable to sell it or to run it into the ground profitable.

[Wicked98Snake]

Sounds like a queer situation for sure.