Keep Layoffs from Killing Performance

By David Wentworth

Layoffs, downsizing, restructuring, terminations - no matter what it's called, nobody is happy when people lose their jobs. It is a traumatic event for all involved - whether it's the affected employees, the managers who have to deliver the news or the workers who remain to pick up the pieces. It's the latter who are often ignored after downsizing, to the detriment of the organization, and i4cp's Reduction in Force survey has found that few companies have any strategies in place to help survivors.

This neglect often causes the organization to suffer, according to research from Franco Gandolfi (2008), director of the MBA/EMBA programs at Regent University. His research of numerous downsizing studies from the past 20 years found that most firms never realize the financial gains they were expecting from downsizing. In fact, firms that did not undergo downsizing outperformed downsized firms in both the short term and the long term.

Many of the problems that afflict organizations that have reduced their workforce can be traced back to remaining staff. Gandolfi found that survivors often suffer from guilt, fear, anger and insecurity, which leads to absenteeism, distrust, poor performance, lower morale, and disengagement. Remaining workers are also often faced with new roles and different responsibilities and have a difficult time adjusting.

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