Cat Is Out of the Bag

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Cat is out of the bag: KANA and Layoff Gone Awry(A)

1) Who are the key constituents in this case and identify each of their interests?

The key constituents in this case are in the table below:

Constituents Vicki (VP of Int. and HR) and Bryan Kettle (CFO) Chuck Bay (CEO) and Tom Doyle (COO) Customers Terminated employees and unions Survivor employees Managers

The investment Community HRManagement

Interests making the layoff process go as smoothly and transparently for the business as possible achieving the expected financial results in the last quarter of 2001 and sustaining competitivenes doing business with a long-term financially healthy company minimizing the number of terminated employees or maximize the severance pay keeping their job and avoiding any worsening of the working conditions keeping the key employees in the company and the employee moral in general as high as possible to sustain their division performance making profits and avoiding losses providing its payroll operation service to KANA

2) Evaluate the layoff process followed at KANA

The scheduled process was probably too complex and quite demanding the day of the layoff. There were too many things scheduled to be done on the October 1st just after the official communication to all the employees. Looking at the big picture, there were two very important reasons for KANA to have decided October 1st as the layoff day. First of all Chuck had promised to Wall Street that the company would show pro forma profitability in the last quarter of 2001. So it was very important to cut costs as much as possible in the last quarter. And secondly, it was very important to avoid any negative influence in quarter 3 business performance and closing as many deals as possible in quarter 3. Obviously October the 1st was the day chosen in order to be compliant with both requirements.

4

The layoff committee made a great job identifying all the individual aspects of the lay off. This is the...
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