What is downsizing?

Downsizing refers to the process of a company reducing its number of employees, typically, downsizing involves making redundancies. Perhaps it deserves a different title as it is more than often about getting back to basics as opposed to just reducing the number of employees.

There are a variety of strategies your company can adopt when implementing downsizing. Research has shown the top three strategies are redesigning job positions, combining agency units, and simplifying rules and procedures.

There are many reasons as to why your company may be choosing to downsize, including, to reduce costs, to improve the speed of decision-making, to improve their competitive strategy, to enhance communications within the organisation, to maximise shareholder returns, and to improve organisational efficiency.

Why is downsizing important?

Downsizing your company can lead to many positive impacts. What is probably considered the greatest benefit to downsizing is financial improvement as in the long term costs can be reduced and profits be increased. As well as this, your organisation would need to re-evaluate and rewrite their business plan and processes to allow for a more accurate reflection on their current status, including outside influences.

However, if carried out poorly, downsizing can have some negative effects. For example, the remaining workers can feel a sense of job insecurity and your company could be facing a loss of talent. Therefore, it is important to identify measures to overcome negative effects with care and consideration to the businesses needs. It is important that the process of downsizing is carried out as effectively and efficiently as possible as the success and/or failure of your company is heavily determined by the strategies, organisational, industrial and environmental characteristics.

How we can help you with downsizing

Downsizing a company is never a pleasant or necessarily nice task to carry out, so we can help by giving expert advise on how to effectively implement it, how to manage any backlash and how to carry out that difficult conversation. Difficult things can be made easier by involvement of a third party as they are more objective towards the situation than internal staff.

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