DOWNSIZING – CHALLENGES

 

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Downsizing can have significant social and psychological effects on employees—both those who remain and those who leave.

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Common Problems:

Employee Retention

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Downsizing may lead to the loss of important and skilled employees. When they see their peers leaving, they begin to doubt their future at the company.

Without these valued members of the organization, the productivity of the company may be reduced.

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Survivor Syndrome

 

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The employees that remain with the organization following downsizing may suffer survivor syndrome, feel guilty that they remain while some of their valued work colleagues are unemployed, and may suffer from low morale wondering whether they are likely to lose their job in future downsizings.

 

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Cultural Adjustment

 

 

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Downsizing is a major change requiring very competent Change Managers to deal with these problems; it is always better to see all other options before going for this type of organizational restructuring.