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!

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:

Who Would You Take With You to Mars?

What makes a great team? What traits do you value in teammates? Project teams can learn a lot from the latest thinking about designing teams for extended space exploration.

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.

Preventing Sidebars

Sidebar conversations between meeting participants waste time and reduce meeting effectiveness. How can we prevent them?

Paradoxical Policies: I

Although most organizational policies are constructive, many are outdated or nonsensical, and some are actually counterproductive. Here's a collection of policies that would be funny if they weren't real.

Notes to Self

Many of us jot important reminders to ourselves on sticky notes, used envelopes, scraps of paper, and whatnot. Often we misplace these notes, or later find them too late to serve their purposes. Here's a low-tech alternative that works better for some.

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

Forthcoming issues of Point Lookout

Coming October 4: Self-Importance and Conversational Narcissism at Work: I

Conversational narcissism is a set of behaviors that participants use to focus the exchange on their own self-interest rather than the shared objective. This post emphasizes the role of these behaviors in advancing a narcissist's sense of self-importance. Available here and by RSS on October 4.

And on October 11: Self-Importance and Conversational Narcissism at Work: II

Self-importance is one of four major themes of conversational narcissism. Knowing how to recognize the patterns of conversational narcissism is a fundamental skill needed for controlling it. Here are eight examples that emphasize self-importance. Available here and by RSS on October 11.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenogMhuqCxAnbfLvzbner@ChacigAthhhYwzZDgxshoCanyon.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