The Situation

A UK-based subsidiary experienced sustained financial losses driven by an underperforming core product that required significant improvement to remain competitive. Historically, losses had been offset by financial support from an overseas parent company. However, changes in legal and regulatory requirements meant that continued subsidy was no longer possible.

Without immediate action, the subsidiary faced a material risk to its ability to continue operating and to remain viable, the business needed to reduce costs rapidly while protecting critical capability required to improve the product.

The Task

The targeted redundancy exercise aimed to:

• Reduce operating costs to a sustainable level without external subsidy
• Reshape the workforce to align with future product and business priorities
• Protect critical roles essential to product development and customer delivery
• Ensure legal compliance and procedural fairness
• Maintain organisational stability during a period of significant change

The Action

HR Business Consultants developed an approach and process which included:

• Identify the roles potentially at risk
• Develop transparent communication with employees
• Development and implement fair and documented redundancy selection criteria
• Individual Consultation
• Provision of redundancy pay, notice and wellbeing support

Managers were supported to deliver communications consistently and compassionately.

The Result

The redundancy exercise resulted in:

• Targeted cost reduction in areas of reduced strategic importance
• Financial stabilisation without reliance on parent company subsidy
• Retention of critical skills required to improve the product
• Full legal compliance
• Greater clarity among remaining employees on business direction and priorities

Conclusion

The targeted redundancy exercise was a necessary intervention to safeguard the future of the business following the withdrawal of parent company subsidy and the need for product improvement. By acting decisively, transparently, and responsibly, the organisation stabilised operations and created the conditions to refocus on product competitiveness and long-term sustainability