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Sanofi Layoffs Are a Lesson in How Not to Do It

Sanofi-Aventis (SNY) could not have handled its recent round of layoffs in a worse way. It's like a case study in how not to do it. As a result, the process attracted negative attention to the company -- and heaped more indignity on those who lost their jobs -- that could have been avoided.

First, look at what Sanofi did. It told its workforce immediately before the Thanksgiving break that they should stay at home on the following Monday and await a phonecall telling them whether their job was safe or gone. In addition, the company wished its employees a happy Thanksgiving. Predictably, this created a huge amount of stress among drug sales reps who had to pretend to be happy while they avoided talking about work with family on Turkey Day.

Certain managers were told over the weekend who they had to fire -- meaning news of the scale of the layoffs leaked before the layoffs actually happened.

The company also declined to talk publicly about what it was doing -- which only made Sanofi's own employees and the media more curious about what was going on. There's no mystery here -- Sanofi has the same problem with drugs going off patent, creating declines in sales, that every other company has. Pfizer (PFE) and Johnson & Johnson (JNJ) have laid off more people. And yet for some reason Sanofi decided that a cloak-and-dagger approach was necessary.

Sanofi could have reduced publicity -- and curiosity -- by making a candid public statement that simply described how many people are affected, why the company was doing it, and the negative consequences of not doing it. But the company didn't do that. Instead, Sanofi spokesman Jack Cox put out this anodyne statement which obscures rather than illuminates what is going on. (Cox has been a fair dealer with BNET in the past, and probably knows that the days of keeping layoffs a secret are gone, so one assumes that he's been handcuffed by management on this issue.)

The result was that on Monday hundreds of stressed out Sanofi reps took to their message boards at Cafe Pharma and dissected the company in glowing, F-word laden detail. Check out this thread regarding the New Jersey sales territory -- they're actually listing individual employees' names! Here certain managers are accused of lying about their reps' performance reviews. This is a typical sales rep comment:

I cannot make sense of this either. 2nd Last year and top this year. I am really pissed. FUCK U SA- does not seem like logic in their dcn making.
Note that Sanofi did this the exact same way last year. This is a company that seems determined not to learn.

Layoffs are an unpleasant fact of life, but they can be conducted with dignity and companies can avoid this kind of bad publicity. (I've been laid off before, and I know.) The best way to do it is to be straightforward and transparent with employees. This means avoiding management cliches and HR-psychobabble, and just telling it like it is. Employees also want to know the criteria. Was it random? Was it based on performance? How many others were cut? (The Sanofi sales force still doesn't know, although estimates are 1,200-plus. Sanofi confirmed 750 were being laid off today.) People can accept layoffs. They just want to know how and why they happened.

Going forward: Plavix and Avapro will go off patent soon, causing a further need for sales force reductions. Its oncology division is on the chopping block too. Perhaps Sanofi can handle those rounds better.

Image by Flickr user Chris Campbell, CC.

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