Other positions were deemed unnecessary and eliminated

From Into the Raging Sea by Rachel Slade. Page 34.

Compounding TOTE’s plight: Puerto Rico, the company’s cash cow, was collapsing. Islanders were fleeing the bankrupt state, reducing demand for goods from the mainland. TOTE’s direct competitor in the Puerto Rican trade, Horizon Shipping, went bankrupt in early 2015.

Further, new environmental regulations were about to render TOTE’s old steamships obsolete.

In 2011, TOTE engaged a consultant to figure out how to run the company leaner. He immediately replaced long-standing managers and staff. Other positions were deemed unnecessary and eliminated. It appeared to those who worked on the ships that TOTE wanted younger officers and the cocaine bust seemed like an excuse to clear house.

TOTE may have had an ulterior motive for firing Captain Hearn: the old shipmaster had become a troublemaker. A few years before the drug bust, TOTE replaced El Faro with a new class of vessel in Alaska to meet environmental regulations. The old steamship was tied up in a Baltimore slip. Hearn had mastered El Faro in the icy Pacific Northwest for seventeen years, then was transferred to helm her sister ship El Morro in the warm waters between Jacksonville and Puerto Rico.

In his estimation, El Morro was an inferior ship, a rust bucket, seriously neglected while working herself to death in the corrosive Caribbean run. The hot, humid climate relentlessly gnawed away at her steel, leaving rusty tears streaming down her ancient hull.

Throughout my consulting career, there has always been a tension between two equally important principles - the value that objective data can provide (typically through spreadsheets) and the value people can provide through cultural norms, implicit knowledge, and institutional memory. Sometimes the spreadsheets tell you that you need to rebalance assets and/or adjust workforce levels. It is ugly thing that has to be done. But it can only be done successfully to the extent that you pay attention to the people value. If you have to reduce by 20%, it needs to be done strategically in order to sustain culture, norms, knowledge and institutional knowledge.

Clients and shareholders typically prefer that the cuts be dictated by spreadsheet algorithms rather than be complicated by the fine art of human divination. And there are labor laws that also make discriminating between workers to protect the whole a more difficult task as well.

But if you don't find a way to balance spreadsheet management with human value management, you end up with the worst of both worlds. A smaller and more ineffective workforce.