A Guide to Downsizing for the Perplexed CEO

by / ⠀Career Advice / December 29, 2021
Guide to Downsizing

You’ve decided to reduce your personnel size. It’s likely that this wasn’t an easy choice. Nonetheless, here you are, ready to lay off a significant portion of your workforce. If this procedure is not managed correctly, it may result in a significant interruption to your organization.

Downsizing Guidelines to Follow

When it comes to downsizing a company, you must be proactive and consider long-term issues and objectives. It won’t be easy, but by following the six guidelines below, you may reduce the disruption that downsizing can have on your company.

1. Be an open and honest CEO.

You and your supervisors must be as honest as possible when individuals are laid off and downsizing plans are in the works.

Begin by organizing a team meeting to inform your colleagues of the reason for the reduction. Be open and honest with them. For example, explain that you’ve chosen to downsize since the firm has missed its sales targets three quarters in a row. Also tell them if your firm has lost some of its most important accounts. Explain to your staff why you selected downsizing over other operational cutbacks.

Maintaining transparency will aid in the reduction of rumors that may cause anxiety and distraction. When employees aren’t attempting to predict what will happen next, they are more likely to remain engaged and optimistic throughout the change.

2. Assuage fears by establishing new leader objectives and responsibilities.

After a reduction, it’s natural for employees to be afraid and unsure about the organization’s future.

Conduct more team and individual meetings during this difficult period. Set objectives for staff to work on between meetings, so they have something to concentrate on. This might assist them in staying on track despite all of the changes going on around them.

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Once your workers understand why you’ve decided to downsize, you’ll need to let them know how their positions could alter. Determine the new objectives and duties for each team member. Remind them why their positions are critical to the company’s overarching aims and objectives. Tell them how you think they’ll fit into the new group. Then, describe what’s unique about their responsibilities and what’s crucial for future success.

Employees will be less concerned about losing their jobs and more interested in their daily work if they have a clear vision of how they fit into the future of your organization.

3. Have a gambit in place.

You’ll need a 30-day, 60-day, or 90-day strategy to ensure that personnel transition seamlessly into their new jobs and that company efforts don’t fall behind. As a leader, you should ask yourself the following questions:

  • Is it true that I have the appropriate people doing the correct tasks?
  • Do members of your team have the tools and resources they need to function successfully and efficiently?
  • What is the relationship between the plan and the organization’s objectives?

Cross-train personnel wherever feasible, so that specific responsibilities and functions aren’t overlooked when the workers responsible for them are let go. You don’t want a single employee to feel overworked because they are the only one who knows a job.

4. Concentrate on the CEO essentials.

It’s probable that prior to the company reduction, you concentrated on ensuring that staff were productive throughout the appropriate work hours. You’ll want to concentrate on positive activity that will keep workers motivated after you’ve reduced your employment.

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Set goals for your personnel to help them stay focused. Allow team members to understand the benchmarks and whether or not they are fulfilling them. On a regular basis, address what is measured and offer real-time feedback. This will guarantee that everyone in the team is on the same page and focused on the most critical tasks.

Discuss how severe short-term workloads will benefit the company’s long-term prospects on a regular basis. “I understand you have a lot on your plate right now,” you can add, “but I’ve gotten numerous comments from our customers about the wonderful customer service you’ve provided them.”

Be a CEO and a mensch at the same time.

5. Give back to your staff and make leader sacrifices for them.

You may not be able to prevent a little hostility among your surviving personnel at first, no matter how hard you try, but you can often alleviate these feelings by giving back to your staff or making little sacrifices for them.

You might, for example, provide flexible work schedules.

You only need to think beyond the box, such as enabling workers to switch work hours so that everyone may take longer lunches or come an hour later. It may be tough to arrange at first, but the improvement in staff morale may be well worth the effort.

Another suggestion is to treat staff to a breakfast or lunch as a group. Alternatively, if it’s around the holidays, you may make an even larger sacrifice and give your staff their Christmas bonus.

All of these actions demonstrate to your employees that, even in difficult circumstances, you care about their well-being.

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6. Demonstrate empathy

Make an effort to be real with those who have been let go, and keep in mind that the remaining employees will have a harder task. It’s a hard change for everyone.

Allow the employees to express their thoughts about the downsizing by asking them how they feel about it. Asking people for their opinions is preferable than having chats behind their backs. Even when a company isn’t reducing, keeping the current staff engaged is a challenge

About The Author

Kimberly Zhang

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders.


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