How to Downsize Your Workforce – Without Destroying Staff Morale

Downsize Without Losing MoraleDownsizing is a negative, stressful and potentially disastrous process that may result in long-term damage to your business. Unfortunately, a business may have to downsize in order to survive and remain viable. Organizations will consider downsizing as an option when two big companies merge, the economy slows down or due to negative market or low sales growth. Besides cost to the business’s own bottom line, downsizing has a negative impact on the employees that are retrenched, as well as the employees that remain. However, by focusing on the employees that are still with you, through careful planning, clear and concise communication and a lot of empathy, downsizing can be managed effectively without leaving your team lacking motivation.


The communication structures that are put in place during downsizing play a vital role in the success or failure of the process. Custom-created video messages, websites, individual letters and notice boards are effective tools that can be used to communicate with the workforce.

Engage with Employees

The downsizing process can negatively impact the trust in and loyalty towards a company, so it is crucial that a company engage with employees during this time. When engaging with employees, a company can explain the decision, the process that will be followed and alternative options.

Investigate Alternative Options

Employers are responsible for the well being of their employees, and it is therefore important to investigate any alternative options that may impact on the downsizing process. Flex time, short term contracts, reduction in salary, limited benefits and the outsourcing of non-core functions can reduce the number of employees that will lose their jobs.

Share the Operational Vision

It is only natural that the employees that remain with the company will be concerned about job security. Sharing the operational vision of the company with employees will allow them to understand where the company is heading. In addition, employees can then commit themselves to the tasks that are required in order for the company to survive and grow.

Provide Assistance

The employees that remain will look closely at how the company deals with the employees that are retrenched. If the company offers the affected staff assistance with finding new jobs, or retrenchment packages that exceed the minimum requirements, it will positively impact the morale of the remaining staff.

Staff morale is a vital component of a successful business, and the morale of employees requires special attention when a company downsizes. Effective communication that is clear, concise and addresses all of the concerns that employees may have is crucial to the success of the process. Indeed, companies that show openness throughout this process find that they retain loyalty and trust, and that employees are more supportive of the transition.

Projections, Inc. has been in the business of helping employers communicate in times of crisis and transition since 1979. Take advantage of our knowledge and create a powerful custom video or employee-focused website. Want to see examples or a case study? Just let us know!


About the Author Projections

Since 1979, the Projections team has been helping companies across North America build a culture of engagement that increases productivity. In becoming an employer of choice, our clients find they have a decreased risk of third-party involvement, allowing them to focus on their company's success.

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