What will the Post-Layoff Company Look Like?
Having a clear, well-defined vision of the company is imperative before the layoff is executed. Management should know what it wants to accomplish, where the emphasis will be in the new organization, and what staff will be needed.
Without being directed according to a clear vision of the future, the new organization is likely to carry forward some of the same problems that initially created the need for the layoff. Unfortunately, many managers underestimate the momentum of the old organization to recreate the same problems anew. Unless there is a clearly defined, shared vision of the new company among the entire management team, the past will be likely to sabotage the future and create a cycle of repeated layoffs with little improvement in organizational efficiency.
Always Respect People's Dignity
The methods employed in many poorly executed layoffs treat employees like children. Information is withheld and doled out. Managers' control over their employees is violated. Human resource representatives scurry around from one hush-hush meeting to another. How management treats laid-off employees is how it vicariously treats remaining employees -- everything you do in a layoff is done in the arena, with everyone observing. How laid-off employees are treated is how surviving employees assume they may be treated.
Why does this matter? Because successfully planning for the new organization will keep it going and improve its results. You must keep that exceptional talent, who are also the employees most marketable to other organizations. When they see the company treating laid-off employees poorly, they'll start looking for a better place to work, fearing their heads will be next to roll.
Respect the Law
While it's important not to allow the legal department to design a layoff, it's nevertheless important that you respect the employment laws. In different countries such laws include entitlements tied to civil rights, age discrimination, disabilities, worked adjustment, and retraining. These laws are important and should be respected for what they intend as well as what they prescribe -- or proscribe. If you have planned your lay-off according to business needs, and not on head count or seniority, you should have no problem upholding the law. You will almost always find yourself in legal trouble when you base your layoff on factors other than business needs.
Mini-cases: Good Examples
During the merger of BB&T Financial Corporation and Southern National Corporation, redundant positions were eliminated through the strategic use of a hiring freeze.
Hewlett-Packard implemented a so-called fortnight program in which all employees were asked to take one day off without pay every two weeks until business revenue increased.
Mini-case: Bad Example
Scott Paper conducted a layoff of 10,500 employees in the mid-1990s. In the years that followed Scott was unable to introduce any new products and saw a dramatic decrease in profitability, until it was eventually bought out by competitor Kimberly-Clark.
Making it Happen
Downsizing successfully is immensely difficult. The following ideas can help to focus thinking for anyone considering such a move.
- Treat all employees with respect. Communicate too much rather than withhold information.
- Research applicable laws and follow the spirit of the legislation.
- Afterward, give employees the psychological space to accept, and discuss, what has happened.
Conclusion
There are two important factors to keep in mind when planning a layoff: respecting employee dignity and business planning. No one, from the mailroom to the board-room, enjoys downsizing; but when the need for a reduction in staff is unavoidable, a layoff can be accomplished in such a way that the problem is fixed and the organization excels.
See You Can Downsize With Care - for People and the Business
