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New Manager Cuts Staff to Save Costs, but Overtime Bills End Up Rising Instead

smiling businessman with other employees in the background

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One mistake a lot of new managers make is that they make changes that they think will be good for the company, but they don’t actually understand the consequences of the changes. They may think they’re saving the company money, for example, but in reality, their decisions cost the company more money than ever.

In this story, one engineer explains what happened at a company he used to work at when ownership changed hands. The new manager tried to cut costs by reducing staff, but he didn’t realize that would mean the remaining employees had to work a lot of overtime to get all of the work done.

They worked so much overtime, and their paychecks were so big that HR was even suspicious about what was really going on.

Keep reading to see how the story plays out.

I don’t care what you have to do just get it all done your bonuses are on the line (sweet overtime pay)

This happened several months before I left my last job.

The company I was working for went through something of a restructuring.

The old owner and boss retired and handed the company to his youngest son. Who in turn forced a lot of the great people in high positions out and replaced them with his under qualified friends.

One new guy made a classic new guy mistake of trying to change things.

I was a team lead engineer in the safety and compliance department. I had a team of three senior engineers and their juniors, plus a personal secretary, two general secretaries, and an office administrator.

One of the people hired to oversee all the engineers of the company was a fresh-out-of-school business student who didn’t know the first thing on what we do or how we do it. His mindset was getting more out of us then was actually possible.

It was his brilliant idea to downsize the department.

Before there were two teams like mine. Instead he moved one team to be on build site and pawned all the extra work on my team. Unfortunately we had already been swamped with the extra work. We were falling behind.

The new guy wouldn’t listen to reason.

The way our contracts were set up we had our base salary + end of year bonuses (based on contract completion) + any hours worked a week above 44 (which was paid overtime at a premium rate.)

I went to the new department lead and I explained to him that we were swamped and needed a few new people or we needed another team.

Him being the cost cutting s.o.b. he was would hear nothing of it. Instead I was met with a, “Do what you have to do to get it done I don’t care how much you have to work or your yearly bonuses will be in jeopardy.”

They had to put in a lot of overtime.

I tried to explain the situation, that it’s just too much work.

His bright idea was to print out everything he said in his letterhead, sign it, and leave it at that.

I had a nice long conversation with my team and the office administrator pointed out that we had, on company letterhead signed by the “boss”, a ticket for all the overtime we want.

So that’s what we did. We gave him exactly what he wanted. We got all the projects done by working 80hr work weeks for three straight months. (Let’s just say the pay checks were beautiful)

HR wondered what was up!

It was after the three month mark I guess, someone in HR noticed the huge paychecks everyone in my department was pulling in. My boss and I were called into a meeting with HR and the owner of the company.

Well, they tried say I was scamming the company out of money. In those 3 months they paid out almost 2x more than they would have if they kept the two teams as they were.

But I had all the information I needed. I kept all the emails and signed documents from the department lead and handed everything over (photo copies). I also put down a copy of everyone’s contract, with the bonus part highlighted, where it states “paid on a per contract basis.”

That year my bonus was 3x bigger then it normally was.

Here’s how it ended.

But after that incident I left the company (three months after it had become a bad working environment.)

On a side note, when I left the company they had to buy my contract out, but that’s a completely different story. I’ll tell it sometime.

Additionally all of us who were eligible for the bonus took 1/3 of our bonuses and split it with the support staff.

New managers who change things that are working well are really incompetent managers.

If you enjoyed this story, check out this post about an employee who figured out how to stop his manager from constantly stealing his phone charger.

Let’s see how Reddit responded to this story.

One person has a theory.

Another person has a wish.

I completely agree with this comment!

Very true! Reality is different than what you learn in school.

The new boss clearly didn’t do a very good job of translating what he learned in business school to the reality of working in an actual business. They’re not necessarily the same. Real life can throw curve balls after all.

OP did the right thing by working as much overtime as it took to get the work done. But working 80 hours a week for months sounds absolutely awful even if the pay was amazing. I would need a vacation after that!

I hope he has moved on to bigger and better things working for bosses who actually understand how to make good business decisions. I hope the new boss learned that eliminating employees can cost more than keeping them on staff.

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