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L ECTURE -16-17 # S YNOPSIS

Downsizing and Layoffs: Employees Job Security I used to work in an orange juice factory; until I got cannedThey said I couldn't concentrate. I used to be a doctor, but I didn't have the patients. I used to be a barber, but they said I couldn't cut it. I used to be a musician, but the conductor said I wasn't noteworthy. A significant change in attitudes and expectations of the workers seems to be taking place worldwide. Previously workers need was focused upon to get a good job to be upwardly mobile. Now a days workers want merely to get a good job and keep it has for many, become a distant goal. Downsizing and layoffs do cause palpable if temporary harms to employees. But this is a cost that must be endured by the affected parties or nation if the multinational is to maintain its competitiveness in global markets and it has to return to its shareholders maximum profitability. If profitability is the ideal of commerce, downsizing and layoffs are a business necessity Downsizing and layoffs are the temporary suspension or permanent termination of employment of an employee or (more commonly) a group of employees for business reasons, such as the decision that certain positions are no longer necessary or a business slow-down or interruption in work. Reasons for Downsizing: There are a number of reasons why a company downsizes its employee base. Merging of two or more firms: When a certain firm combines its operations with another firm and operates as a single entity, in order to stay in profit or expand the market reach, it is called a merger. In case of a merger, certain positions become redundant. The

same work is done by two different staff members. Usually in such a case, the company cuts staff to eliminate redundancy in work, especially in case of higher management positions. Acquisition: If one organization purchases another one, there is a definite change in the management and the acquired company staff has to face unemployment. The reason for this is the same as the earlier case, viz to cut costs and and increase the revenues. Change in management: The change in the top brass of a company can also result in downsizing. The working methods and procedures vary with the management. Therefore, a significant change in the management roles may drastically affect the employee size to suit a particular style of working. Economic crisis: This is the single biggest cause of downsizing. Often, it consists of huge lay-offs by a number of organizations across various domains. The recent economic recession facing the world, has triggered a number of lay-offs in many reputed and popular firms in the world. Strategy changes: Some companies may reduce certain areas of operation and focus on other areas. For example, if a company is working on a project in which there are no assured returns, it may downsize it's employees working on that particular project. It focuses its resources on specific projects, which could be profitable ventures. Excessive workforce: In a period of high growth, a company hires excess staff, to meet the needs of a growing business. However, in times of recession the business opportunities dwindle, leading to downsizing of the surplus staff that was hired. Increase in efficient work flow and computerized services : If an organization work process is extremely fast and easily meets the requirements of the market, it may downsize some of its workforce. Similarly, if manual work can be done by a machine, in a much better and cost-efficient way, it also results in the reduction in the number of employees.

Outsourcing practice: Organizations catering to international markets require a huge and efficient employee base. If the labor can be obtained by 'exporting' the job to other countries, a huge downsizing takes place in the parent country. For instance, if a certain job can be done more effectively in India and is more viable economically there, than in the United States, the business is operated from that country. Benefits of Downsizing: The benefits of downsizing are stated below: The most obvious benefit is the reduction of expenses that comes after layoffs are made. It also means lower prices on products for consumers. For instance, General Motors is known for having a very strong loyalty to its employees, therefore layoffs in the organization are rare. The result is that GM has to charge $2000 more for its cars than companies like Ford and Chrysler. As this case indicates, downsizing reduces the company costs, which is good for the company as well as the consumer. In addition, the day after downsizing plans are announced, most firms stock prices rise. This is definitely a benefit for the company. Another benefit of downsizing is that it frees up employees to work in other areas This benefit is connected to another benefit, which is that downsizing allows for new jobs to be created. Downsizing can help the organization to realize its optimal size. Consequences of Job Insecurity: Decreased: Job Satisfaction Organizational Commitment Safety Compliance, Safety Knowledge, and Safety Motivation Physical and Mental Health

Creativity Work Quality Increased: Turnover Work Withdrawal Behaviors Negative Affective Reactions to Organizational Change Accidents, Injuries, and Near Misses Productivity Things That Can Make It Worse: Collectivist Cultural Values High Job Involvement Low Self-Efficacy for Adapting to Organizational Change

Downsizing and Layoff handling tips: Following strategies for layoffs and downsizing will minimize the damage to those employees: Live your life as if each day is the last day of your employment. Think it as vacation as an alternative to layoffs. If You feel loss, guilt, sad, discouraged, then try to connect with your Coworkers personally or over phone or email. you need a positive outlook to help you find your next opportunity, If you got the opportunity of Golden Handshake in the period of downsizing, take that.

I Just Lost My Job: How Am I Going To Tell My Kids? If you lose your job, here are some pointers about how to tell your children. 1. First, take care of you. Take stock of the talents you have to offer another employer. Take stock of the good things you have in your life. 2. If you have a significant other in your life, tell your partner before you tell your children. 3. Together, tell the kids. Use simple language and short sentences. Tell the truth. I want to tell you some news. Today, my job was eliminated. The company eliminated many jobs, including mine, because they needed to save money. 4. Anticipate your childrens concerns. Assure your children that they will be okay. I am going to look for another job. Our family will be okay. 5. If you are worried about how you will survive financially, figure out how you can cut costs until you find another job. 6. Include your children in cutting costs but let them know it will be temporary. If your child asks you to buy him or her something and you need to wait until your finances are in better shape, say, We can buy this for you once I find another job, okay? 7. Let your children know how you are feeling but also assure them that you will be okay. I am upset that this happened but it has happened to many other people who have gone on and found other jobs. I will be fine. 8. Answer their questions honestly and simply. 9. Allow your children to talk to their friends about this. Allow them to confide in others. 10. Hug them. The exit interview is your opportunity to obtain information about what your organization is doing well - and, what your organization needs to do to improve. This is the way you can create a positive impact about yourself which can bring further opportunities for you.

Try to leave a job before losing it.

How (Not) to Conduct a Layoff Do Dont Break the news individually and confidentially Explain why a downsizing is happening Describe what effect is expected on the organization Provide a timeframe Provide psychological and career counseling

Hoard information Escort employees out the door with security Let the news media break the story Cut jobs across the board. Rather, make the tough decisions to selectively cut jobs.

Imagine if your day was downsized by 20% to 19.2 hours Where would you get the resources to complete the tasks that formerly took 24 hours? Would you cut all tasks by 20% or prioritize and skip unnecessary activities (e.g., the 30 minute snooze-button)?