One of the main reasons that people go into business is to make money. However, as a business grows or changes, its profit margins can wind up shrinking instead of growing. That could mean that you have to make some major changes in order to balance your budget and regain control of the company’s finances.
Common reasons for declining profits include recent mergers or erratic growth patterns in the company. Mergers may mean that there is significant redundancy with multiple departments are people doing the same work. Erratic growth can mean that you built departments a little bit at a time without a focus on efficiency. Restructuring your company is an opportunity to address expenses and increase profits.
Restructuring is complex and can generate significant risk
Restructuring often means moving people from one department to another, getting rid of redundant positions, eliminating entire parts of your company and changing the responsibilities or compensation that people receive for the work they do.
Employees who lose their jobs or face a cut in position or wages may want to fight back by bringing legal claims against your company, such as breach of contract or discrimination. It is of the utmost importance that your company comply with both its own contracts and with federal and state employment laws during restructuring efforts.
Changing the way that your business operates and streamlining things is not an excuse to discriminate against specific groups of employees, such as those close to retirement age. Getting help from someone who understands business law and the complexities of employment law can help you minimize your risks while restructuring your business.