Summary
The layoffs will be primarily in the Business Change and IT departments. Of those positions eliminated 42% are contractors. This is expected at the conclusion of a successful business change strategy. However, there 800 employees will also face the loss of their jobs. On the surface this could be a tactical weakness of NU's strategy in that their redeployment was not part of the plan. If union contract rules hampered the redeployment, NU should have factored it in early on and worked with the union for redeployment. NU with paying a dividend is balancing their responsibilities to their stockholders (one group of stakeholders) with their other responsibilities of continued capital investment. Employees are stakeholders also and their interest must be considered. It is not just those whose positions are eliminated but it is also the psychological effect on those remaining.
Analysis
As the layoffs are primarily in the Business Change and IT departments, there should be minimal customer service impacts. It does signal that NU is satisfied with its current level of IT services and will not be undertaking new IT projects in the near future.
