On Friday my colleague Iain Campbell was in the Midlands working with the directors of a medium sized Estate Agents that we are helping to restructure. It was his dubious pleasure to advise many of the employees that their jobs were going.
Now normally, directors have to consult with staff for months, choose the roles that are being made redundant before using skills matrices to select the unfortunates. Usually taking advice from HR consultants along the way for fear of Tribunals.
NOT in CVA! using the powers of the CVA process we have quickly taken the costs of this company down to survival levels. No payments for redundancy or lieu of notice are payable by the company. Directors have reduced their own packages too and the overheads are much lower now. Any tribunal awards (very rare) are simply frozen by the CVA process.
Even if the housing market (or more appropriately the mortgage market) remains locked for months ahead, which looks likely, this company can survive now.
Looking at the wider picture, the credit crunch really does impact directly on those people like construction company employees, estate agency staff, advertising sales people. In the last month we have removed scores of people from their jobs using CVA. They will be having a tough time finding new employment I think which we cannot dwell too much upon.
What sector will this so called credit crisis affect next? Senior bankers, smart financial sales people who sold fancy debt packages?
No thought not.
UPDATE 7.30am July 15th 2008
London: The Times reports today that "estate agents report lowest level of home sales in 30 years as lending is squeezed". RICS reports that sales fell 40%. Guys that's old news - its over 50% for some our clients and other people contacting CompanyRescue!