The New Pink Slip?

In my over 15 years of experience consulting with organizations from 3-150,000 people, I thought I had seen it all. Start-ups growing exponentially only to shed all but 5 resources as the bubble began to burst in 2000, large organizations building a cadre of resources only to have them benched for months at a time and then layoff that strong bench without those highly skilled individuals ever seeing action or as I personally experiences, arriving to my first day of work to find the CEO locking the doors for good. But the following truly takes the proverbial cake... I recently witnessed the most ill-informed way of conducting a layoff I have seen in my meanderings through the Silicon Valley, Boston Tech area, and global outsourcing arenas. The following lay-off process was obviously engineered and implemented without consideration of key communications strategy, resourcing options, business continuity planning or long-term client engagement and retention. Employees of recently purchased Company X arrived to work one day in July to find red, yellow or green slip of paper on their desks. Red indicated immediate termination, yellow indicated that they would be changed to contractor status for an undefined period and green meant that they were safe. This occurred without any warning, explanation or advanced communication of any type. The result was complete and utter chaos. The now former employees of Company X and those "transitioned" to contractor status were left feeling betrayed. Those that were "safe" wondered how long before they received a red or yellow slip themselves and quickly updated their resumes. From a change management and communications perspective, my business core consulting capability, I have to ask, "What was Company Y (the purchaser of Company X) thinking?"
Who thought that this would in fact be an appropriate way in which to deliver this news?
Did they not consider the backlash or repercussions of this approach?
Were they thinking about it at all?
Did the person responsible for this think, "Wow, I know how we can do this quickly and easily!"
Or was there some type of rationale for conducting layoffs in this way?
Unfortunately or fortunately I will never know their reasoning for taking this approach since I nor my company were involved in this tragic event but my curiosity in like a plague. I think about it constantly and felt compelled to write about it.
Before I close with a lesson learned, the repercussions of their actions were immediate and severe. Client files and data were lost and resources with solid client relationships on high profile and critical projects had no time to transition or hand-off.
Lesson Learned:
In the end the people of Company X suffered and I am very sorry for what they have been through, a lay-off is horrible enough to experience without the added insult of this method of delivery but as I have experienced personally, there is solace in the fact that a lay-off is really a business decision and that it no longer carries the stigma in the job market it once did, and that job market is good right now.
The other victim of this ill-formed plan is the customer. The customers (I have heard and seen first hand) have suffered as a result, projects have been delayed, project management has suffered or become non-existent and that sends a message. Company Y was short-sided in their approach and ultimately did not think about the business impact of their actions. I predict that the clients formerly of Company X and now unwillingly of Company Y will not remain clients for long and word has gotten out that Company Y is not someone you want to do business with. Perhaps Company Y will blame slow sales or declining market share on the economy or some other unforeseen variable but in reality it will be their own actions that ultimately caused this.