Objective: To write an effective negative news message using a memo format. The negative news message delivers news that the audience does not want to hear, read, or receive. How you choose to deliver the message can influence the audiences response. Description: You are a part-time accountant for a small local retail company. You provide Patricia Zho, the owner of the company, with quarterly reports summarizing her income and expenses. Together you determine a budget and compare it to actual data to help make important decisions such as ordering merchandise and providing raises. After two years of continual losses and sales, you believe Patricia must reduce her payroll she has consistently refused to consider the suggestion in the past stating that her employees are like family and she cannot reduce their wages or fire anyone. She'd rather go out of business. At this point, the data are telling you that she will have to close her door if she does not reduce payroll. Twenty-five people are on the payroll averaging $35,000 a year each. Sales continue to decline as described in the accompanying graph. Inventory costs her 40% of the sales price. Requirements: To help her understand the situation write a memo giving her the bad news. Memos are hardcopy documents that follow a set format and are typically sent to internal audiences. (p. 93-94 Shwom) You will support the message with the data in this table (DO NOT USE this table in the message): The information in the table above has been included in the graph below. The graph has been created to show sales versus costs (i.e., the average quarterly salary of 25 salespeople plus the cost of inventory). Sales versus costs show that as sales have been declining, costs have been holding fairly steady. Now, costs exceed sales, and the company may have to close its doors if it does not either reduce payroll or increase sales.

Sales Quarter 20XX-01 20XX-Q2 20XX-03 $510,000 $480,000 $452,000 20XX-Q4 20XY-01 20XY-02 - 20XY-03 - 20XY-Q4 $412,000 $389,000 $381,000 $325,000 $315,000