Staples Company Name: Institution: Staples Company Staples Company, a giant supplier of office equipment is looking forward to shrink 40 of its 330 shops (Staples, 2013). This is attributable to pressure from its rival companies that seem to be doing well in world market…
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The transformation forces businesses to rethink their methods and offer new products or services in their stores. In the process, such businesses engage in downsizing. During the process of downsizing, Staples Inc reduced its outlet shops by 15%. This made the company realize reduced profits of 72% (Staples, 2013). The decrease in profits was due to charges of restructuring the company. Staples Inc is experiencing a considerable heat from the southern part where online retailing is flourishing. This forced the company to take more than 90% of its products to be sold online (Staples, 2013). Additionally, Staple Canada develops an innovation lab to test new services centered on small-business customers. The lab is piloting meeting rooms and rental office, a self-serve Banner Xpress machine used for printing, Starbucks coffee shop and technology-training center (Straus, 2013). The stores chosen for downsizing are more than 25,000 square feet though they could reach15,000 square feet. Some of the stores have leases which run out within a year. This gives Staple company time to close them at that time (Staples, 2013). Importance of Downsizing Downsizing helps in managing duplication of roles. It is easy to find more than two employees conducting a task that a single person could conduct. Downsizing assists in correcting such scenario (Staples, 2013). Downsizing is also good in clearing ghost workers who earn a salary without working. Secondly, the system allows an organization to recover from its financial crises. This is because the company can lessen operational costs by lessening proportion of employees. Downsizing also enables the managers to manage an organization properly because the organization is reduced in size (Staples, 2013). Additionally, the company can get rid of incompetent employees and hire employees who are willing to serve the company diligently (Straus, 2013). Human Resources Challenges Facing Staple Company Staple Company is not exactly sure of downsizing would achieve the needed purpose. This is because; the remaining employees would ask more payment due to overworking. Secondly, the employees who were sucked must be compensated. This means Staples Company would have to incur an extra cost thus increase its cost of operation. Downsizing is a source of poor morale, guilt and stress on retained employees. As a result, the employees are likely to reduce their productivity that may reduce the company’s output (Staples, 2013). The company experiences low level of productivity from its employee due insecurity of their jobs as a result of downsizing programme. Another challenge is lack of technological skills in their fields. Inadequacy and weakness due lack of basic education to cope with the changing technological and scientific development also contributes to the current problem. Another problem is lack of mechanism to create promotion opportunities amidst employees. This is due to a high number of employees that the organization hires. The company also loses some of its best employees to rival companies that offer best terms of employment and job security. The company is also unable to attract employees with technical talents. Most of employees shun the company due to its downsizing programme that requires it to reduce its employees. Furthermore, the company lacks good engineers or computer experts who can assist in distribution of its resources. To counter this problem, the company is going
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