Downsizing and Layoffs - Career Development

What is Downsizing?

Removal of the employees from the organization or reducing the employee size within an organization is referred as Downsizing. A huge count of people was left unemployed during the period of 1980’s. In most of the organizations employees at a certain higher level, say managers were mostly targeted because of the following reasons -

• Organizational restructuring
• Reengineering
• Delayering
• Economic downtrends

The reason behind removing the employees from the organization may be because of the mergers and acquisitions happening in the business world. The organizations does take care of the employees who have been removed by providing some of the services like training for searching jobs, writing of the resume, services related to salary negotiation etc.

The major mistake that is usually done by the companies, who are into downsizing, is that they do not communicate with the employees who have been removed. They need to be communicated in a proper way and share information related to the future career prospects with the company and the willingness of the companies in recruiting them again in such situations.

What are the pitfalls of Lay-offs?

The practice of downsizing and lay-offs were usually done by the organizations in order to increase the profits. But it is not realized by the organizations that downsizing alone will not generate profits. Some of the researches and studies conducted on this topic revealed that more profits are being generated by the companies who are into expansion of their assets and employees thus producing new revenue, than those companies who are practicing the lay-off strategy.

But one more drawback here is the future of the employees who are being hired for a temporary basis. Even these employees are being benefited by the organizations providing flexibility in increasing staff.

How the teams are used for work production?

When companies enter into mergers and acquisitions, these may lead the working employees into -

• Conflicts
• Social Exclusion and
• Job Mobility

It is very hard to assess the work of an individual employee when all the employees of the organization work as a team. It also becomes difficult for the employee to assess the skill sets where improvement is required. This issue can be solved by focusing more on generic and essential comparative skills that are being facilitated by team performance.

Why do Companies Downsize?

There are many reasons behind the companies going for downsizing. One of the main reasons is competitive pressure. But this was practiced as a trend in the late 1990s, where companies lay-off the permanent employees and opted for temporary employees or sometimes even part-time and freelancing employees.

The companies have taken these steps because of the global demands for outsourcing. But not the scenario is changed. Organizations are trying hard to retain the core employees who have talent and new recruitments are being done only for few functional areas. By this it can be analyzed that the employment opportunities provided by the companies for the new job seekers is less and accordingly the choices of career is less, and to enhance the career development inter-company mobility is being practiced.