Like a tank, the recession continues to roll right over companies. Take Fleetwood Enterprises. Vacation trailers and modular \n\nhouses don't sell when people are out of work and struggling with upside-down mortgages. Even if someone wants to buy, banks \n\nhave clamped down on credit, making loans scarce. Fleetwood's sales have plummeted 32 percent from a high of $2.4 billion in \n\n2006, and the company has lost $119 million along the way.\n\nMore on CIO.com\nGood Business Intelligence Can Help With the Right Cuts\n\nHow to do a Layoff Right\n\nHow to Recession-Proof Yourself\n\nLaid-off Workers as Data Thieves\n\nSo last summer, like many manufacturers, Fleetwood scaled back factory production. That wasn't enough, so Fleetwood is now \n\ngoing after big cuts. Before filing for Chapter 11 bankruptcy protection last month, the company had plans to close nine of \n\nits 27 factories in the United States and Mexico and lay off 760 of its 5,700 employees.\n\nAcross the nation, grim-faced executives are breaking similar news. Offices are being consolidated, plants shut, employees let go. Such maneuvers, of course, are \n\nintended to save money; Fleetwood expects to save $40 million per year.\nBut achieving lasting results can take months of work performed largely by the IT staff\u2014a behind-the-scenes scramble \n\nthat is often underestimated by others inside and outside the company. It's not as if the press release and pink slips go out \n\nand savings pour in.\n\nThere are the obvious chores, such as blocking outgoing employees from corporate networks and redeploying computers. Often, \n\nwhen a facility is closing, IT has to set up new equipment at the remaining offices, such as a bigger data network to handle \n\nan increased volume of transactions that a now-closed location used to process, notes Steve Phillips, CIO of Avnet, an electronics \n\ndistributor fighting to make $150 million in cuts.\n\nBut IT executives who made it through the last recession in the early 2000s say the current one's a doozy that brings \nnew \n\nchallenges.\n\nNow smartphones and thumb drives are everywhere\u2014hard to track and easily loaded with sensitive corporate data, says \n\nMike Jackson, CIO at Rockwell Automation, which laid off 600 of its 21,600 employees in September and is cutting costs by $240 \n\nmillion. Another $50 million to $100 million in cuts are planned to begin in October. \n\nThe Sarbanes-Oxley Act (Sox), which didn't exist earlier, provides another new source of pain. At Fleetwood, for example, \n\nwith other departments focused on consolidating workloads among remaining employees, IT must watch that new job descriptions \n\nand business processes don't violate Sox rules on segregation of duties, says Larry Smith, Fleetwood's vice president of IT. Yet Smith finds invigorating the challenges in \n\ndownsizing projects where so much money is on the line. "This is where you prove you can really manage," he says.\n\nProve it, you must. The technology group must not become an obstacle to making real the millions in savings promised when \n\ncompanies close offices and lay off employees, says Anna Frazzetto, vice president of technology solutions at professional \n\nservices firm Harvey Nash. "If CIOs don't step up, credibility diminishes," she says.\n\nSmith and fellow IT leaders in hard-hit industries have a warning for their peers: Convey the scope of IT work involved in \n\ndownsizing. More than ever, senior management is asking fewer people to do more. That includes the IT group itself, where \n\nbudgets have been frozen or cut and layoffs have reduced the number of hands available for what Smith calls a "tidal wave of \n\nactivity" unleashed by a companywide cost-cutting drive. (See "Make a Difference Before the Cuts Come.")\n\n"You might have plant managers who make the hard decision and then are done with it emotionally and want to move on," he \n\nsays. "The last thing I want to hear is 'We're done,' because we're not even started yet."\n\nPick Up PCs and Pull Wires\n\nAlthough smart executives know that closing an office or factory isn't as simple as it sounds, only those who have done it \n\nknow the complexity and nuance. CIOs should educate their CEOs and peers about what it's like on the ground.\n\nWith $3 billion in revenue, Arch Coal is one of the biggest coal mining companies in the United States, supplying the \n\nelectricity industry with fuel to power the country. To concentrate on the most productive facilities, Arch is selling the \n\nrights to some mines or divesting them outright. The figure for Arch Coal's 2008 revenue in this paragraph was corrected on 4\/1\/09. View the correction. \n\nIn mid-2007, for example, Arch sold a mine in remote West Virginia to Alpha Natural Resources for $40 million. CIO Michael Abbene, sent someone from the desktop group along with three \n\nindividuals from their local support contractor to West Virginia from Arch headquarters in St. Louis to disconnect Arch's \n\nserver and 50 PCs from the corporate network. Of \nthose machines, 19 moved with Arch employees to another site. The remaining \n\n31 were handed over to the buyer as part of \nthe deal.\n\nFirst, all data on those 31 machines was moved to network shared drives prior to deletion and then backed up on a USB drive. \n\nWith guidance from Arch's lawyers, certain geologic information was copied to another portable USB drive and given to Alpha. \n\nThe team reset the administrator password on all PCs that stayed behind. Alpha had two or three people onsite at various \n\ntimes during the weekend to help. Arch also sent a person to the mine to review and pack up paper documents that were to \n\nremain with the company. While that handoff took two months, it can take longer. A 2005 deal to sell several subsidiaries \n\nthat operated four mining complexes took seven months because the buyer had little technology of its own at the start. Arch \n\nagreed to provide IT services, such as site-to-site VPN capability, while the buyer set up its own systems, Abbene says. \n"They created a whole infrastructure that almost mirrored what we had." \n\nWhen selling a facility, Abbene advises, the CIOs from each company should meet to go over the IT implications of the \n\ndeal\u2014from equipment and data disposition to deadlines\u2014before anyone touches any systems. CIOs should then \n\ndesignate a project manager to orchestrate the work.\n\nWhen Arch closes a mine, it generally puts together a team that may include local mine management, IT, human resources, \n\naccounting, legal, payroll land management, marketing and sales, operations or purchasing.\n\n"Every situation is different. You must understand what the acquiring company wants to do," Abbene says.\nIn a true closing of an office or factory, such as Fleetwood's factories in Willacoochee, Ga., IT has to disassemble the \n\ninfrastructure. Dismantling systems entails more than flipping switches. In February, two of Smith's IT staff spent a week at \n\nthe Georgia plants hoisting 100 computers into crates and boxes, ripping out wiring and crawling through ceilings and closets \n\nto gather up several routers and other pieces of \nnetworking equipment. \n\nSmith tries to keep the dismantle team small, so as not to disrupt regular IT work at headquarters. If it's a big job that \n\nmust be done unusually fast, he will sometimes hire a firm to help, especially when taking apart cabling, which is \n\ncomplicated and time consuming, he says. "There's a lot of just plain old physical work."\n\nBefore PCs and laptops are packed up, they are evaluated for reuse or recycling. If the machine has a new enough processer \n\nand can accommodate at least 2GB of RAM, Fleetwood will upgrade it\u2014reimaging the machines with licensed software and \n\nredeploying them to employees in other facilities who had been using older systems. Shuttering a plant completely takes from \n\n30 to 120 days, Smith says.\n\nSometimes, though, a closure isn't a closure. For example, a Fleetwood factory in Waco, Texas, has stopped making \n\nmanufactured housing, but several service and sales personnel remain at the facility. Or a shutdown of a large plant may \n\noccur in waves, first cutting production to 50 percent, then 10 percent or less to use up remaining raw materials.\nMeanwhile, Smith's IT group has to know who's going away when, shut off access and maintain other systems. IT also has to \n\nfigure out whether any networking equipment can be removed as excess and look at the network blueprint to see if firewalls \n\nneed to be reconfigured now that fewer people are on the systems.\n\nIn other locations, assembly lines are stopped and those blue-collar workers let go. But administrative people have kept \n\ntheir jobs and been moved to another office. In that case, the data network servicing the remaining office may need a \n\nlarger-capacity circuit to handle additional transactions generated by the people who transferred in.\n\n"It may sound simple, but one major thing we struggle with, to get accurate information about, is what they are doing with a \n\nplant," Smith explains. "Skeleton crew? Close? Sell? If selling, what will be bought? Is there a service group or sales group \n\nstill officing there?" He says he always has to ask several times, in different ways, "Define what you mean by 'close.'"\nGood information comes from good relationships. IT and project managers should talk to as many manufacturing colleagues as \n\nthey can at least a few times per week to stay in sync with actual versus planned schedules, he says.\n\nLet Employees Go\u2014But Not Your Data\n\nTechnology now touches so many more areas than it did at the start of the decade that untangling and accounting for it all \n\nduring downsizing\u2014if not done methodically\u2014overwhelms IT, says Jackson, Rockwell's CIO.\n\nWhen making cuts, the most delicate work involves disconnecting laid-off coworkers. Their access \n\nto the company network as well as local applications must be blocked and their computing equipment collected, cleansed and \n\nredeployed. Not only are emotions high but so are legal implications. Unlike during the dotcom bust, smartphones and thumb drives are more prevalent. You can fit 32GB of data on a BlackBerry memory card. \n\nThe devices can also be slipped easily into a pocket alongside one's personal items as a desk is packed up, putting \n\nproprietary information at risk. Get the mechanics of data and device reclamation wrong, and you open the company to legal \n\nproblems. \n\nStephen Fox, an attorney at Fish & Richardson who specializes in labor and employment law, recently sued an executive who \n\nleft his client's company for a similar position at a competitor. The client argued that this executive couldn't do his new \n\njob without using trade-secret information belonging to Fox's client. Although the executive wasn't laid off, what happened \n\nwhen HR and IT processed his departure serves as a warning to other companies, Fox says. \n\nWhen the executive left, IT blocked his access to the corporate network but forgot to stop the e-mail program from forwarding \n\nhis messages to his BlackBerry, which was his own personal device. He opened several of those e-mails, Fox says. Cutting off \n\nall access to company data must be swift and thorough, he says. Leaving accounts open or missing a step "makes you vulnerable \n\nif you ever have to prove in court that you truly do keep secrets that should be kept secret."\n\nRockwell has a strict policy about cell phones, says Jackson. He issues only BlackBerrys owned by the company and closely \n\ntracks who has one, he says. No corporate data is allowed on personal phones. As for portable drives, IT and the legal \n\ndepartment do their best to educate employees on what's permissible to download, he says, but still, "it's virtually \n\nimpossible to assure you have all that information." To address the roving thumb drive problem, HR stipulates in writing to \n\ndeparting employees that no corporate data may be removed from the company.\n\nWhen Rockwell laid off about 600 people last fall, IT set up a command center to make sure nothing fell through the cracks. \n\nHuman resources coordinated with IT to disable an outgoing employee's network access within moments of a manager delivering \n\nthe bad news, Jackson says.\n\nFor each employee being let go, IT collated reports from its three asset management systems to be sure all company-owned cell \n\nphones, laptops and other devices were returned.\n\nThey got all the gear but it would have been smoother, he says, if the company had been using just one asset management \n\npackage; it's consolidating now. Asset management systems are key to ensuring IT collects everything it should, says \n\nFrazzetto of Harvey Nash. The equipment itself is worth something and the material on it could be worth much more, she says. \nEvery CIO has his own favorite tip about protecting information during a layoff. At Arch Coal, the accounts of outgoing \n\nemployees in critical positions aren't immediately deleted. Instead, as a manager sits down with someone to tell him he's \n\nbeing laid off, IT, in its corner of the building, will change the person's system password. That way, e-mail doesn't bounce \n\nback to senders and the manager can later sort it and assign follow-up to colleagues as needed, Abbene says. An escort, who \n\nis usually the person's manager or someone from HR, will oversee the packing up of individuals deemed in "sensitive" \n\npositions, to help ensure they don't leave with portable drives, he adds. On Abbene's staff, one person in particular works \n\nwith human resources on employee terminations. "Most of the time, she gets the word from HR before I do," he says. \nDiscretion is critical, adds Phillips, Avnet's CIO. IT can do the work of cutting user access privileges invisibly to the \n\nrest of the workforce. In person, he urges his team, "Be honest and respectful to the employee. It helps them get on with \n\ntheir future." \n\nDeadlines for this kind of work are aggressive to minimize disruptions, Jackson adds. "From a business point of view and a \n\nhumane point of view, it's best to do it quickly."\n\nLet Nothing Fall Through the Cracks\n\nNo one has it tougher right now than the IT group at Fleetwood. They're doing it all: closing factories, consolidating \n\noffices, moving handfuls of employees to new locations and laying off hundreds of blue- and white-collar workers in two \n\ncountries.\n\nTo manage, the group treats each event as a separate project, opening service requests in Oracle's Siebel customer \n\nrelationship management software. Each event template has six categories that Smith considers crucial: overall time line, \n\nnetwork hardware, PC hardware, applications, security and Sox analysis. He gives business-unit managers weekly reports for \n\neach project, including percentage of the work competed in every category.\n\nSox concerns Smith because, he notes, no one had to worry about complying with it during the last recession. Sox regulations \n\nemerged, in part, to guard against financial fraud that compounded the 2002 downturn. This time around, as companies rush to \n\nrespond to the dire economy, sometimes compliance isn't top of mind. Staffs are cut and survivors are handed more tasks to \n\ndo, at times dangerously so. For example, an accounts payable clerk may take over the job of setting up vendor accounts, \n\nwhich used to be done by a colleague. But one person doing both jobs violates rules on segregation of duties, which say that \n\nno individual should control a business process end to end.\n\nAt Fleetwood, the IT group watches for those risks because other managers may be more focused on consolidating. "I tell all \n\nmy people, from programmers to business analysts, to watch out for issues with controls. You see something, raise your \n\nhands," Smith says.\n\nOnce personnel are shifted around and their jobs are defined, he or another IT staffer will talk through the processes and \n\nsystems involved to see if red flags fly. When they do, the problem can sometimes be fixed with a technology \n\ntweak\u2014perhaps changing the order in which transactions run. When that doesn't work, IT will bring it to the business \n\nunit to work out a change of process, he says.\n\nSmith has looked for software to model segregation of duties but hasn't found anything he likes. He advises other CIOs to \n\nstay on top of Sox all the way through a staff reorganization of any type, but especially during a cutback, when change can \n\nbe chaotic. "There's only so much shrinking you can do without running into trouble." \n\nJackson's group at Rockwell tracks its consolidation work with Microsoft Project and Excel, noting who completed each step \n\nwhen: collecting hardware, removing software, wiping drives, redeploying, selling or recycling the machine. "The people on \n\nsomething like this tend to be same people we put on mergers and acquisitions. They just do it in reverse," he says. \n\nLook Ahead to Better Times\n\nWhen downsizing goes according to plan, savings materialize. After Avnet's fall layoff, several extra computers and laptops \n\nwith life left in them were available, Phillips says. "Our PC spend in the first quarter was dramatically lower than it would \n\nhave been."\n\nFleetwood normally spends about $1 million per year refreshing PCs. But because plant closures and layoffs have freed up \n\nmachines, the company has spent "a fraction" of that in the last three years, Smith says.\n\nFurther, Smith expects to convert a key manufacturing system from a legacy VMS software platform to Oracle's JDEdwards and \n\nSiebel. To date, Fleetwood has either met or beat its schedule. "It's a terrible thing to say, but the best time for a major \n\nconversion is a downturn, when everything's quiet," he says. "It costs less, there are fewer plants to convert."\n\nStill, even if IT's downsizing work is airtight and the projected savings materialize, it may not be enough. Some economists \n\ndon't expect significant recovery this year, despite the combination of tax cuts, job creation and other stimulus measures \n\nthat President Obama and Congress have enacted.\n\nTime will tell for Fleetwood. Its shares were delisted from the New York Stock Exchange in January, after the company's \n\nmarket capitalization sank below NYSE's minimum of $25 million for more than 30 days straight. Fleetwood stock now trades \n\nover the counter, in pennies.\n\nSmith, however, remains optimistic. "I've been working in manufacturing companies my whole career, 35 years. I've been \n\nthrough a couple of ugly downturns before. You have to stay positive and focused," he says. "This is where you figure out \n\nwhether you can really manage or not. There's tons to learn if you don't get sucked into the black hole."