Downsizing The Organization

Content
Introduction

Downsizing plan

Timeframe

Budget

Impact to staff

Change management
 INTRODUCTION
 Reducing an organization's hierarchical structure is a frequent commercial technique
known as downsizing.
 This procedure frequently entails firing employees or reducing expenses by using
fewer resources.
 Mainly discusses about why the organization need to downsize their operation and
how the organization should downsize their operation through the strategic level
planning, tactic level planning and operational level planning.
 Thereafter, report discuss about the timeframe of the downsizing and budget
requirement of the downsizing plan
 How downsizing affect to the employees within the organization and how to
overcome the resistance come from the employees within the organization.
 Downsizing plan

Strategic level
 The downsizing plan shall start from the top level of the organization, and it is needing a
strategic plan.
 balancing the organizational capabilities and its resource capability (human resources), and
it finally tries to create strategic fit based on the notions of strategy
Tactical level
 To activate the strategic plan the middle level management shall execute the tactical plans
of downsizing.
• Identify the non-value adding departments within the organization and cut down their
operation and employees.
• Reduce the cost etc
Operational level
 This level of strategy makes it easier for the organization's numerous departments or divisions
to coordinate with one another in order to meet its goals.
• Reduce the staff by 25% compared to last year.
• Reduce the wastage
 Time frame

Week Task
1-2 Weeks Plan the downsizing (Strategic, tactic and operational plan)
2-4 Weeks Identify non value adding activities and departments within the organization
4-6 Weeks Communicate to the staff regarding the downsizing
6-8 Weeks Layoff unnecessary staff and unnecessary activities within the organization
8-10 Weeks Restructure the process
10-12 Weeks Redesign job roles and assign new peoples to jobs
12-14 Weeks Get the feedback and evaluate the performance
 Budget

 Extraordinary direct expenditures that can be characterized as

implementation costs are incurred during the early phases of
downsizing. Severance packages, early retirement packages,
outplacement services, and administrative processing costs are the
primary implementation or direct costs.
How to Downswing Impact to staff

 Employee level reduction

 Pressure on Temporary Staff and Increasing Workloads
 Loss of Trust and Safety
 Retraining

 Adjusting Compensation and Benefits

 Change Management

 In order to work with the workforce at hand, be cost-effective and productive at the
same time, it requires properly planned and effective change management
strategies.

 The act of downsizing is the simultaneous termination or call-off of a number of

employees, usually for financial reasons.

 This is usually referred to as termination for cause, yet it has nothing to do with the
potential or behavior of the employees.

 This downsizing process has two sides: the employees who will be let go, and the
remaining workers who will be managed more profitably by the company. Effective
change management is now crucial and required for both sides.
THANK YOU