Shanghai Euclid Printing Machine Co.: Navigating through Layoffs and Closure
In late 2012, Shanghai Euclid Printing Machine Co. (Shanghai Euclid), a joint venture between a Chinese state-owned enterprise and an American multinational enterprise, was in the process of closing down. Established in December 1993, the joint venture had experienced successive rounds of downsizing over the past 18 years, dropping from an original high of 1,800 employees to a workforce size of 668 in 2012. In its place, a 100-per-cent state-owned enterprise would now be founded, and any employees and business activities that would be retained needed to be moved to this new enterprise, Shanghai Gutenberg Printing Machine Co. (Shanghai Gutenberg). The general manager at Shanghai Euclid had to make some difficult decisions about the strategic orientation of Shanghai Gutenberg. He also needed to come up with a plan regarding the remaining 668 employees, deciding whom he could retain and who would need to be laid off. Considering the importance of social harmony in the Chinese context, he also needed to determine how to conduct the workforce change process in order to cause the least possible disruption to employees and other stakeholders.