An Overview: The job of downsizing is brutal to those responsible for the actual task of termination. Perhaps this is because under normal circumstances, all pre- downsizing efforts are focused on who will be leaving, rather than on those who will be needed to keep it altogether.
When a company implements layoffs, it is essential that planning and preparation take the concerns and well-being of the surviving employees into account because layoffs can create a lost sense of purpose, or acting through rebellious silence or loss of motivation on the job. Layoff survivors see their work environment as being destabilized by changes, and then retention becomes an issue.
A mismanaged layoff can result in a vicious circle. Companies downsize to cut costs, but then are quickly forced to make new hires as surviving employees leave for what they perceive to be more stable environments. This turnover feeds a loss of production and lower quality of work that likely began with the initial layoffs, which triggers another demand for new hires. Since the cost of a single new hire is generally equivalent to one year’s salary, any savings from layoff are negated.
(more...)