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.

A 19th century shipwright's mast broad axe. Photo courtesy U.S. Federal Highway Administration.
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!
Your comments are welcome
Would you like to see your comments posted here? rbrenZLkFdSHmlHvCaSsuner@ChacbnsTPttsdDaRAswloCanyon.comSend me your comments by email, or by Web form.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.
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:
Help for Asking for Help
- When we ask for help, from peers or from those with organizational power, we have some choices. How
we go about it can determine whether we get the help we need, in time for the help to help.
Problem Defining and Problem Solving
- Sometimes problem-solving sessions are difficult because we get started solving a problem before we
know what problem we're solving. Understanding the connection between stakeholders, problem solving,
and problem defining can reduce conflict and produce better solutions.
Twenty-Three Thoughts
- Sometimes we get so focused on the immediate problem that we lose sight of the larger questions. Here
are twenty-three thoughts to help you focus on what really counts.
How to Waste Time in Virtual Meetings
- Nearly everyone hates meetings, and virtual meetings are at the top of most people's lists. Here's a
catalog of some of the worst practices.
How to Get Out of Firefighting Mode: II
- We know we're in firefighting mode when a new urgent problem disrupts our work on another urgent problem,
and the new problem makes it impossible to use the solution we thought we had for some third problem
we were also working on. Here's Part II of a set of suggestions for getting out of firefighting mode.
See also Personal, Team, and Organizational Effectiveness and Managing Your Boss for more related articles.
Forthcoming issues of Point Lookout
Coming March 29: Time Slot Recycling: The Risks
- When we can't begin a meeting because some people haven't arrived, we sometimes cancel the meeting and hold a different one, with the people who are in attendance. It might seem like a good way to avoid wasting time, but there are risks. Available here and by RSS on March 29.
And on April 5: The Fallacy of Division
- Errors of reasoning are pervasive in everyday thought in most organizations. One of the more common errors is called the Fallacy of Division, in which we assume that attributes of a class apply to all members of that class. It leads to ridiculous results. Available here and by RSS on April 5.
Coaching services
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenZLkFdSHmlHvCaSsuner@ChacbnsTPttsdDaRAswloCanyon.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
Follow Rick





Recommend this issue to a friend
Send an email message to a friend
rbrenZLkFdSHmlHvCaSsuner@ChacbnsTPttsdDaRAswloCanyon.comSend a message to Rick
A Tip A Day feed
Point Lookout weekly feed

- Your stuff is brilliant! Thank you!
- You and Scott Adams both secretly work here, right?
- I really enjoy my weekly newsletters. I appreciate the quick read.
- A sort of Dr. Phil for Management!
- …extremely accurate, inspiring and applicable to day-to-day … invaluable.
- More