HR’s Role in Cost-Cutting Initiatives Your company is facing its most difficult year in memory; the stock price is down 40% over the past year and the company is budgeted to lose $100 million in 2009 after a similar loss in 2008. The CFO has been tasked with finding $300 million in savings and has come to you to discuss how HR will contribute $40 million of the targeted savings. The project team from McKinsey has identified several “opportunities” for HR-related cost-savings and presented the following list of initiatives for your review. It is up to you to decide which of these actions should be implemented to reach the $40 target. • $5 million: Eliminate the 401k match • $3 million: No merit increases for 2009 • $7 million: 5% across-the-board cut in salaries • $11 million: Headcount Reduction of 5% • $2 million: Suspend all training and development programs and activities. • $3 million:
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