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Perspective on Change: Downsizing at Cineplex Entertainment

Rebecca M. Price

Sandermoen School of Business, University of Fredericton

MBA 5025D: Leadership in Change Management

April 2, 2023
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Perspective on Change: Downsizing at Cineplex Entertainment

The purpose of this paper is to describe, analyze, and reflect on a workplace change that

this author recently experienced at their current place of employment as a marketing manager at

Cineplex Entertainment. This paper will examine the type of change experienced as well as the

drivers behind this change, the communication and execution processes used in this change, the

necessary leadership and follower characteristics required, and a reflection of the personal

impact experienced by this author from this change.

Experiencing the Planned Change of Downsizing

In 2020, Cineplex was greatly affected by the COVID-19 pandemic, as many other

businesses were globally, forcing the company to temporarily close over 170 theatres and 13

entertainment-restaurant hybrid locations nationwide for over half of the year. Although our

company was able to reopen theatres (at a reduced capacity) in the later part of 2020, new movie

releases were scarce, and customers were extremely apprehensive about returning to public

spaces. According to Banares (2020), Cineplex experienced a loss of $98.9 million in its second

quarter and said free cash flow was negative $53.8 million on an adjusted basis. From June 2020

to present, Cineplex has been restructuring and downsizing across all departments in order to

recoup the financial loss and rebuild effective teams.

Drivers and Results

There were many drivers that forced Cineplex to initiate downsizing in the months

following the shutdown of our physical locations. An obvious driver was the economic strain

that our company experienced without incoming profit from venues. Cineplex was still

responsible for paying its hundreds of full-time employees who continued to work remotely,

paying the leases of each theatre, restaurant, and office location, and paying for various other
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expenses such as partnerships and brand programs. The need then arose to cut costs in any way

possible to save money and avoid bankruptcy. Although economic changes are the most

significant drivers of change at Cineplex, within the past year organizational drivers have also

become very important. As our company has found new ways of working, there is not a need for

as many mid-level executives, directors, and senior managers within the chain of command.

Cineplex has continued to downsize by initiating two rounds of lay-offs of mid-level executives

whose positions were deemed no longer necessary.

The results of this downsizing initiative have been measured in two ways: change in cash

flow and productivity. Undoubtedly, employing fewer people at levels above manager has saved

the company millions of dollars by paying fewer salaries, benefits, bonuses, and company

expenses. After the most recent round of lay-offs earlier this year, the company communicated to

all departments that they had already recouped almost half of the $40 million dollar loss we had

sustained and our cash flow was slowly increasing. Productivity has also been a key indicator of

Cineplex’s change success. Our business is still operating at an extremely efficient and effective

capacity despite having less employees and, specifically, less leaders. The result of having less

staff to do the same amount of work has been positive at Cineplex and demonstrates that there

isn’t a need for as many mid-level management positions to ensure that work is being completed.

Execution and Communication Processes of Downsizing

Execution Techniques

For this author, the execution of this downsizing change and each following iteration

have been very abrupt, unexpected, and not communicated prior to implementation. As a

marketing manager with no employees beneath them, changes in organizational structure or

financial analyses are not a conversation which this author is involved in, therefore, initial
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discussions and decisions are made without input from lower-level managers and coordinators.

Once the decision to terminate employment for several employees was made, the execution

typically happens before communication. Employees who are being terminated are contacted by

their direct managers and once each employee has been updated of their employment status, the

remaining employees are contacted by their managers to communicate the news of terminations,

department changes, and role or position changes. For this author, the execution of downsizing

never feels perfect, however, it is a very tedious and emotional change to communicate and

understanding that it needs to be done with caution and compassion is important.

Communication Techniques

Ongoing communication since the initial downsizing and restructuring of our

organization has become much more frequent and in-depth than before the pandemic began.

Previously, Cineplex scheduled quarterly reviews called “Town Halls” which were company-

wide meetings that gave employees a brief update of financial progress, legal updates, and

business initiatives and results. Currently, Cineplex’s communication is further broken down by

department in combination with quarterly Town Halls. Our Marketing department conducts their

own check-in’s frequently (up to once a month) and remote workers (including this author) travel

to head office in Toronto once a quarter for an “All Hands Marketing Team Meeting” which

assesses issues, discusses updates, and works on team building. These “All Hands” meetings

allow department heads and upper-management to communicate changes that will be arising in

the future as well as gauge employee agreement or disagreement.

Additionally, Cineplex now utilizes many new forms and surveys that are requested by

upper-management to provide employee feedback on company issues or changes. These forms

are relatively new to the company and allow for staff who are not involved in larger decision-
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making or change initiations to anonymously submit concerns, suggestions, observations, and

frustrations.

Leadership and Follower Characteristics

Leader Characteristics

For a leader to be effective in leading a change effort they must possess leadership

characteristics which allow them to envision a necessary change, develop and assess that change,

and propel it forward. Change leaders must have well-developed communication skills, including

the ability to both delegate and listen, they must also be confident, emotionally intelligent, and

have strong strategic thinking skills.

Communication is fundamental in all areas of business and in initiating and executing a

change, and solid or unreliable communication can determine the outcome of a change effort.

Good communication builds trust, increases growth potential, and earns employee support.

Confidence often helps in a decision-making process as a change leader must be confident in

their proposed changes and in which ways they will choose to initiate, diagnose, and action their

decisions. Emotional intelligence and strategic thinking are both characteristics leaders should

possess as these qualities improve one’s ability to understand what followers are thinking and

feeling, can help to gauge follower’s perception of change, and allow a leader to adjust efforts

quickly if a portion of the change initiative is not working.

Follower Characteristics

Followers and their specific characteristics are equally important in planned changes as

they will help to determine the overall success or failure of a change effort. Followers must

possess good self-management or self-motivation skills, they must be committed to the

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organization’s purpose or principle, and they must be honest, collaborative, supportive, and

open-minded.

Self-management and self-motivation are necessary skills for followers experiencing a

change in their organization so that they can exercise control and independence by working

without close supervision. Effective followers are employees to whom a leader can easily

delegate responsibility, who anticipate needs at their own level of authority and competence, and

who motivate themselves to complete work. In addition, followers must be committed to an

organization’s greater purpose by exhibiting the desire to participate collaboratively in any

change efforts put forth by a leader. There must be a desire to be open-minded about

organizational change and be supportive to ensure a company’s change efforts are accomplished.

Author Characteristics

Of the aforementioned characteristics of both leaders and followers that are required to

lead a change effort, this author believes that she possesses a combination of both. Although

change can often be difficult for this author and the idea of not knowing what a change’s

outcome will be before executing can be frightening, both emotional intelligence and self-

motivation are characteristics that this author demonstrates daily and can use in future change

initiatives.

This author demonstrates emotional intelligence by understanding, using, and managing

their own emotions in positive ways to relieve stress, communicate effectively, empathize with

others, overcome challenges, and defuse conflict every day in her current position at Cineplex.

As a remote worker, self-motivation as well as self-management are utilized every day to

complete tasks and finish work without having the urgency of a direct manager in-office to push

you to meet deadlines or complete projects. This author also utilizes self-motivation to complete
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coursework and assignments while attending university online and achieve the best result

possible.

The Personal Impact of Downsizing

The experience of downsizing at Cineplex has greatly impacted this author’s confidence

in our company’s leadership capabilities to implement change. Since the execution of this

change, it’s prevalent that Cineplex’s leadership team can make decisions, initiate, and

implement a change extremely quickly. Although downsizing is a change which employees do

not anticipate being executed quickly, the fast decision-making from leadership improves this

author’s confidence in their ability to be agile and move quickly when other opportunities for

change arise. This author’s hope would be that as two-way communication continues to improve

at Cineplex and followers are better being listened to, that changes executed by leadership in the

future may be based on feedback that they receive from employees and it will be assessed and

initiated quickly.

In the future to make change initiatives more successful at Cineplex, this author’s

recommendation is to involve employees in communication and discussions in a more productive

and effective way. As mentioned previously, our company has improved its team building by

inviting our team together in Toronto once a quarter and having us participate in activities and

problem-solving sessions. Many of these activities involve our team discussing problems that

occur in our workplace, possible solutions to these problems, as well as ways in which our teams

and upper management could work together to solve these problems. However, once the team

building is over it seems that the activities we complete are forgotten and are not actually put

into motion. Our company can do much better by taking these team-building activities into

consideration when looking to initiate organizational changes. Employees are often the ones who
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notice when a process doesn’t work exactly as it should and they have the best perspective of

where problems are occurring and ideas to fix them. Involving followers in the initial stages of

change discussions is crucial for creating a working environment that operates well for everyone.

In a future change initiative, this author would like to participate more thoroughly in

feedback requests from upper-management. It can be difficult to express every concern you have

with management, benefits, compensation, processes, ways of working, and coworkers, even

when anonymous. However, it is extremely beneficial to the company to hear each issue you

may have, and to gauge how many others share this concern. Although a change may not be

made right away or at all, it is important that these concerns are brought forward and can be fully

assessed and diagnosed by change leaders. Similarly, it’s important to provide feedback to direct

managers or department heads when something is working well in a company. This author would

like to better communicate both positive and negative feedback to upper-management in order to

help decision-making in future change initiatives.

In conclusion, downsizing at Cineplex has been difficult as we have lost coworkers,

teammates, and leaders, and workloads have increased. However, it has been very enlightening

to see how efficiently our company can work with less resources and less managers. We are

continuing to achieve great success at Cineplex throughout all departments and are slowly

making our way out of the debts caused by the pandemic. In the future, this author would love to

see more change initiatives that are implemented for the sole benefit of the employees rather than

for cost-saving reasons and that our company’s culture continues to thrive in the coming years.
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References

Banares, I. (2020, August 14). Cineplex reports 95% revenue drop after COVID-19 closes

theatres. BNN Bloomberg. Retrieved March 30, 2023, from

https://www.bnnbloomberg.ca/cineplex-revenue-plunges-95-in-q2-with-theatres-closed-

1.1480025

Cummings, T. G. & Worley, C. G. (2019). Organization Development and Change. Cengage.

Boston, MA