Retrenchment to save from bankruptcy

[Alexandoy]

When the business is on the brink of bankruptcy drastic actions should be taken to save the business. One remedy is to retrench workers to ease the burden of salary expenses. The first to go are the workers who are nearing retirement. They can be given early retirement pay. If the company cannot afford then a promissory note can be issued so that the cash flow will not be too tight. Aside from the retrenchment of workers some other cost-cutting measures can be implemented like saving in the utilities and also in other expenses that are affecting the cash flow of the business.

 

[Augusta]

Well, in as much as it is good to save a business from total collapsing by saving cost, I think retrenchment of workers should always be the last option. I have seen a lot of people retrenched collapsed and died while the business survived. The management should always look at other ways of cutting cost to save the business before thinking of retrenching, it is when all else fails that workers should be downsized but some companies starts with retrenchment and send a lot of people into hunger