Double Your Downsizing Damage

Lately, many companies are in deep financial doo-doo. Some have addressed this issue by downsizing. Basically, they fire a lot of people. Often this tactic is so harmful to the company that customers, shareholders, and employees wonder whether management is actually trying to hurt the company.

Is that really possible? To evaluate the performance of your company's Chief Downsizing Officer (CDO), use this handy checklist for executives who really want to ruin their companies in an effective manner.

Be sneaky

Don't let on that you're about to fire 20% of your employees. Giving people a heads up just lets them avoid major purchases and warn their families.

Maintain executive compensation

Don't reduce executive compensation at all. If possible, increase it. This builds resentment among employees, insecurity among customers, and fury among shareholders.

Don't downsize enough

Maintaining or increasing
executive compensation
during a time of cost
reduction and layoffs
is a great way to
build resentment

Make sure that you'll have to downsize again. Doing it twice in quick succession puts everyone on edge permanently.

Announce rolling layoffs

Tell everyone you plan monthly reductions for the foreseeable future, because rolling layoffs could reduce the total number of people affected, assuming conditions improve. But you know what will really happen — people will believe that every month is their last.

Schedule the announcement for December 24th

In Europe, Australia, and the Americas, the optimum time for downsizing announcements is just before Christmas. That way, people will already have spent more money than they would have if only they had known. No point hurting the economy too.

Don't solicit volunteers

Some people actually want to leave — they would prefer a layoff to quitting. Don't lay off people who want to leave, while you keep people who want to stay. You can do more damage if you lay off people who want to stay, while you keep people who want to leave.

Offer early retirement

Early retirement programs offer a relatively safe way to jettison your most valuable and experienced people first, without the legal risks of laying somebody off one week before they become eligible for retirement.

Don't close unprofitable operations

Keep them running. They'll probably lose even more money with only 80% of their staff. Instead, close or spin off any profitable operations, assuming you have any.

Don't cancel any initiatives

Internal initiatives, especially those with only long-term benefits, should remain at high priority. If you must cancel something, cancel anything that might immediately cut expenses or shorten the sales cycle.

Hint that there might be more

In media interviews, when asked if these cuts are the last, squirm. This signals the employees who have alternatives — who are, of course, the most difficult to replace — to get moving on job searches.

How well executed is your company's downsizing program? 1-3: ineffective; 4-7 not so good; 8-10: don't laugh — you might be next.  Top    Next Issue

Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

More about layoffs

Celebrate!  [February 21, 2001]

When you celebrate — even minor successes — you change your outlook, you energize yourself, and you create new ways to achieve more successes. Too often we let others define what we will celebrate. Actually, we're in complete command of what we celebrate. When we take charge of our celebrations, we make life a lot more fun.

Doorknob Disclosures and Bye-Bye Bombshells  [July 10, 2002]

A doorknob disclosure is an uncomfortable, painful, or embarrassing revelation offered at the end of a meeting or conversation, usually by someone who's about to exit. When we learn about bad news in this way, we can feel frustrated and trapped. How can we respond effectively?

What's So Good About Being Laid Off?  [December 25, 2002]

Layoffs during the holiday period of November 15 through January 15 are far more common than you might think. Losing your job, or fearing that you might, is always difficult, but at this time of year it's especially helpful to keep in mind that the experience does have a bright side.

Beyond WIIFM  [August 13, 2003]

Probably the most widely used tactic of persuasion, "What's In It For Me," or WIIFM, can be toxic to an organization. There's a much healthier approach that provides a competitive advantage to organizations that use it.

Encourage Truth Telling  [November 19, 2003]

Getting to the truth can be a difficult task for managers. People sometimes withhold, spin, or slant reports, especially when the implications are uncomfortable or threatening. A culture that supports truth telling can be an organization's most valuable asset.

Those Across-the-Board Cuts That Aren't  [July 14, 2004]

One widespread feature of organizational life is the announcement of across-the-board cuts. Although they're announced, they're rarely "across-the-board." What's behind this pattern? How can we change it to a more effective, truthful pattern?

Organizational Loss: Searching Behavior  [April 16, 2008]

When organizations suffer painful losses, their responses can sometimes be destructive, further harming the organization and its people. Here are some typical patterns of destructive responses to organizational loss.

How to Avoid a Layoff: The Inside Stuff  [January 28, 2009]

These are troubled economic times. Layoffs are becoming increasingly common. Here are some tips for changing your frame of mind to help reduce the chances that you will be laid off.

How to Avoid a Layoff: Your Relationships  [February 4, 2009]

In troubled economic times, layoffs loom almost everywhere. Here are some tips for reconfiguring your relationships with others at work and at home to reduce the chances that you will be laid off.

How to Avoid a Layoff: Your Situation  [February 11, 2009]

These are troubled economic times. Layoffs are becoming increasingly common. Here are some tips for positioning yourself in the organization to reduce the chances that you will be laid off.

Four Popular Ways to Mismanage Layoffs: I  [February 18, 2009]

When layoffs are necessary, the problems they are meant to address are sometimes exacerbated by mismanagement of the layoff itself. Here is Part I of a discussion of four common patterns of mismanagement, and some suggestions for those managers and other employees who recognize the patterns in their own companies.

Four Popular Ways to Mismanage Layoffs: II  [February 25, 2009]

Staff reduction is needed when expenses overtake revenue. But when layoffs are misused, or used too late, they can harm the organization more than they help. Here's Part II of an exploration of four common patterns of mismanagement, and some suggestions for those managers and other employees who recognize the patterns in their own companies.

Coping with Layoff Survival  [March 25, 2009]

Your company has just done another round of layoffs, and you survived yet again. This time was the most difficult, because your best pal was laid off, and you're even more fearful for your own job security. How can you cope with survival?

Teamwork Myths: Conflict  [June 17, 2009]

For many teams, conflict is uncomfortable or threatening. It's so unpleasant so often that many believe that all conflict is bad — that it must be avoided, stifled, or at least managed. This is a myth. Conflict, in its constructive forms, is essential to high performance.

Teamwork Myths: I vs. We  [July 1, 2009]

In high performance teams, cooperative behavior is a given. But in the experience of many, truly cooperative behavior is so rare that they believe that something fundamental is at work — that cooperative behavior requires surrendering the self, which most people are unwilling to do. It's another teamwork myth.

Hyper-Super-Overwork  [August 5, 2009]

The prevalence of overwork has increased with the depth of the global recession, in part because employers are demanding more, and in part because many must now work longer hours to make ends a little closer to meeting. Overwork is dangerous. Here are some suggestions for dealing with it.

What Is Workplace Bullying?  [March 3, 2010]

We're gradually becoming aware that workplace bullying is a significant deviant pattern in workplace relationships. To deal effectively with it, we must know how to recognize it. Here's a start.

Sixteen Overload Haiku  [October 27, 2010]

Most of us have some experience of being overloaded and overworked. Many of us have forgotten what it is not to be overloaded. Here's a contemplation of the state of overload.

Self-Serving Bias in Organizations  [July 20, 2011]

We all want to believe that we can rely on the good judgment of decision makers when they make decisions that affect organizational performance. But they're human, and they are therefore subject to a cognitive bias known as self-serving bias. Here's a look at what can happen.

Pariah Professions: I  [June 5, 2013]

In some organizations entire professions are held in low regard. Their members become pariahs to some people in the rest of the organization. When these conditions prevail, organizational performance suffers.

Changing Blaming Cultures  [March 5, 2014]

Culture change in organizations is always challenging, but changing a blaming culture presents special difficulties. Here are three reasons why.

Constancy Assumptions  [July 16, 2014]

We necessarily make assumptions about our lives, including our work, because assumptions simplify things. And usually, our assumptions are valid. But not always.

Rationalizing Creativity at Work: II  [November 5, 2014]

Creative thinking at work can be nurtured or encouraged, but not forced or compelled. Leaders who try to compel creativity because of very real financial and schedule pressures rarely get the results they seek. Here are examples of tactics people use in mostly-futile attempts to compel creativity.

Why We Don't Care Anymore  [April 8, 2015]

As a consultant and coach I hear about what people hate about their jobs. Here's some of it. It might help you appreciate your job.

Managing Wishful Thinking Risk  [October 21, 2015]

When things go wrong, and we look back at how we got there, we must sometimes admit to wishful thinking. Here's a framework for managing the risk of wishful thinking.

Wishful Significance: I  [December 16, 2015]

When things don't work out, and we investigate why, we sometimes attribute our misfortune to "wishful thinking." In this part of our exploration of wishful thinking we examine how we arrive at mistaken assessments of the significance of what we see, hear, or learn.

Nine Brainstorming Demotivators: I  [January 31, 2018]

The quality of the output of brainstorming sessions is notoriously variable. One source of variation is the enthusiasm of contributors. Here's Part I of a set of nine phenomena that can limit contributions to brainstorm sessions.

Conway's Law and Technical Debt  [January 30, 2019]

Conway's Law is an observation that the structures of systems we design tend to replicate our communication patterns. This tendency might also contribute to their tendency to accumulate what we now call technical debt.

Layoff Warning Signs: I  [August 21, 2024]

One of the better career moves you can make is leaving your current position before your employer conducts layoffs. When you choose the time, you aren't under pressure and you make better decisions. Here are eight warning signs of coming layoffs.

Layoff Warning Signs: II  [August 28, 2024]

Layoffs often signal their arrival well in advance, if you know what to watch for. Some of the indicators are subtle and easily confused with normal operations. Here are three more indicators that layoffs might be secretly underway.

Beating the Layoffs: I  [September 4, 2024]

If you work in an organization likely to conduct layoffs soon, keep in mind that exiting voluntarily before the layoffs can carry significant advantages. Here are some that relate to self-esteem, financial anxiety, and future employment.

Mitigating the Trauma of Being Laid Off  [April 2, 2025]

Trauma is an emotional response to horrible events — accidents, crimes, disasters, physical abuse, emotional abuse, gross injustices — and layoffs. Layoff trauma is real. Employers know how to execute layoffs with compassion, but some act out of cruelty. Know how to defend yourself.

Your comments are welcome

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Personal, Team, and Organizational Effectiveness:

Poverty of Choice by Choice

Sometimes our own desire not to have choices prevents us from finding creative solutions. Life can be simpler (if less rich) when we have no choices to make. Why do we accept the same tired solutions, and how can we tell when we're doing it?

Four Popular Ways to Mismanage Layoffs: II

Staff reduction is needed when expenses overtake revenue. But when layoffs are misused, or used too late, they can harm the organization more than they help. Here's Part II of an exploration of four common patterns of mismanagement, and some suggestions for those managers and other employees who recognize the patterns in their own companies.

High Falutin' Goofy Talk: II

Speech and writing at work are sometimes little more than high falutin' goofy talk, filled with puff phrases of unknown meaning and pretentious, tired images. Here's Part II of a collection of phrases and images to avoid.

Disjoint Awareness: Assessment

When collaborators misunderstand each other's work and intentions, they're at risk of inadvertently interfering with each other. Three causes of misunderstandings are complexity, specialization, and rapid change.

Improvement Bias

When we set about improving how our organizations do things, we expose ourselves to the risk of finding opportunities for improvement that offer very little improvement, while we overlook others that could make a real difference. Cognitive biases play a role.

See also Personal, Team, and Organizational Effectiveness for more related articles.

Forthcoming issues of Point Lookout

Coming July 16: Responding to Unwelcome Events

Unwelcome events have two kinds of effects on decision-makers. One set of effects appears as we respond to events that have actually occurred. Another set manifests itself as we prepare for unwelcome events that haven't yet occurred, but which might occur. Making a wrong decision in either case can be costly. Available here and by RSS on July 16.

And on July 23: Microdelegation

Microdelegation is a style of delegation in which the delegator unintentionally communicates the task to the subordinate in such detail and so repetitively that the subordinate is offended. As a result of this delegation style, many subordinates feel distrusted or suspected of fraud or goldbricking. Available here and by RSS on July 23.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenaXXxGCwVgbgLZDuRner@ChacDjdMAATPdDNJnrSwoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info