Workforce Reduction Selection Under Conflicting Criteria
A software company must cut 12% of its 400-person engineering group, about 48 roles, within six weeks. HR has performance ratings, but the last review cycle was delayed and 30% of ratings are missing. The VP of Engineering wants to protect a recently hired team of 15 engineers working on a strategic product, even though several have low tenure and incomplete ratings. Legal has flagged that the company operates in two countries with different consultation requirements. Managers have submitted draft lists that correlate strongly with team, not individual, performance. The CFO requires the reduction to hit a specific cost target.
1. Design a defensible selection process given missing ratings and legal constraints.
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The process must be criteria-based, documented, and applied consistently before individual names are finalized. Steps:
- Define objective selection criteria tied to business need: role criticality, skills match to the strategic roadmap, performance where evidence exists, and tenure only where legally permitted.
- Handle missing ratings explicitly: use manager evidence, recent project outcomes, and calibrated panel review rather than treating missing data as low performance. Document how each gap was resolved.
- Run a calibration panel across teams to counter the team-level bias in manager drafts and to test the protected strategic team against the same criteria.
- Apply country-specific consultation rules sequentially, with legal review before any notice.
- Reconcile the final list to the CFO's cost target and record the trade-offs.
This protects against disparate impact and arbitrary outcomes while meeting the cost requirement.
2. The VP argues the 15-person strategic team should be exempt from the cut. How should HR respond?
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HR should not grant a blanket exemption, because it would substitute a team-level exception for individual assessment and could look pretextual. Instead, HR should test the claim: apply the same criteria to those 15 roles and see whether role criticality and skills genuinely rank them above others. If the work is truly strategic, the criteria should protect most of them on the merits, which is defensible; an exemption is not.
HR should also ask the VP to document the strategic rationale, timeline, and consequences of losing any of the 15, and require that any protected role be offset by additional cuts elsewhere to meet the cost target. This keeps the decision evidence-based, preserves the CFO's constraint, and avoids a two-tier process that legal or a tribunal could challenge.