The Downsides of Downsizing

I have been employed in, and consulted to, in companies going through periods of “rightsizing” – also known as “layoffs,” “terminations” or “firings.”

The second time I was involved as an employee. The reductions occurred over a period of about 15 months. My department was reduced from twenty employees to three. Some employees resigned, taking positions elsewhere. Some employees were let go; given final checks and a handshake.

Those remaining were expected to continue on. Several things happen when you are a survivor of these events.

The first thing, even before you have a moment to consider what just took place, is that an incredible amount of work is thrown at you, full-force. The work comes like a flash flood; a wall of water ten feet tall, headed straight for you.

There will always be a certain amount of work required for any business to continue. But with only three employees left in my department it was beyond hard to do the work of 20.

This flood of work can take months to address. If the people who left did not use standardized processes and procedures, the work can take months to learn, understand and assimilate.

Important things fall through the cracks and deadlines are missed. Picture a hospital in the hours and days following a major natural disaster. Even though employees are educated and trained to go through this kind of event, when it happens for real, it can be very trying.

The second thing to happen is that service levels to internal and external customers deteriorate.

I liken this to going to work while you are sick, running at about 60 percent of capability. When you show up, coughing and feeling terrible, everyone expects you to work at 100 percent regardless.  No one cares that you are sick, the sympathy ended when you walked in the door.

Now, I cannot speak for all owners running companies and managing through these events. I can speak to the people in charge when I was in the middle of the downsizing events and the floods that followed, having lived through it twice.

Not only did the leaders not understand what had been cut out of the organization, they did not care. They were alarmed that service suffered but did not dig deeper into finding and bringing solutions. Their attitude was clear and simple: fix it and fix it now. The caveat was: don’t spend any money and don’t add to payroll to fix it. Exempt employees were to shoulder the burden; 50 hour weeks quickly became 70 hour weeks.

So, while dealing with all this, two more things happen to the survivors. First, you start looking back for the clues preceding the headcount reductions. You dwell on this because reductions are seldom one-time events; there will be future events and you don’t want to be surprised when it happens.

The second is you wonder if staying where you are is worth it. Yes, you have a job, providing a steady paycheck and usually a nice package of benefits. But the personal cost benefit considerations come into play. Weekends are spent recovering and Sunday nights are often filled with dread.

But the flood of work never ends, and daylight appears a long way off. I picture George Clooney on the bridge of his little fishing boat at the end of the movie “The Perfect Storm” saying, “We’re never going to get out of here.” I have been there; it was not pleasant.

Letting people go is very difficult. But once the cuts are made, it is necessary for leadership to address the survivors. These are the individuals that remain on the payroll to serve create and keep customers; they are the future of your company.

I recommend a three-prong approach to communicating to your employees.

The first is to be authentic. Speak honestly, tell the truth about what brought the organization to the point where people had to be let go.

The second is to share the plan for turning things around. People must believe in their leaders and the plan if there is any hope of things getting better. “Where there is no vision, the people perish” is true. Share the vision. Make it real. Provide hope.

The third thing is to lead. As such, teach, encourage, motivate; learn from and listen to employees. Do what is possible to address concerns and be authentic when doing so.

Never forget, employees want the organization to succeed. Everyone is in the lifeboat together. You are all depending on one another.