Jan 12, 2018 in Analysis

Implication of Downsizing

An aspect of companies and organizations to be sustainable is the aspect that has led to a series of issues including downsizing. These organizations are after proper utilization of resource excluding human management. This is a feature that many organizations use to remain in the market amidst hard times brought about by the falling economy. Downsizing is a term that is widely used to mean the aspect of trimming down workforce in a bid to reduce the working cost. This aspect is practiced very often when the market seems to have little light to enable the company run and at least maintain the competing power between it and other businesses. The changing nature of the markets and economy, leads to companies using this practice as a tool to achieve better performances. This practice is deemed to be disappointing as many employees lose their careers to enhance the growth of the business. This word is also replaced byother various words like laid off, release, termination or firing. This practice is becoming highly used by management (Baumol, Wolff, & Blinder, 2003).

There are various reasons as to why downsizing is put in motion. One of the major reasons that allow the flow of this practice is to enable a better performance of a particular organization. This aspect is practiced when a company may for example wish to replace part of its workforce with new and improved machines. This aspect is quite good as the business can expect that the machines are easier to handle and use less cost. The aspect of the machines to be minimal prone to making errors also attracts downsizing. The company can also realize that it had employed a lot of employees, and wishes to trim the number to a capacity that it can handle. This is influenced if the company starts to face a shortage in the number of its customer that it had.

 The term “laid off” has quite an interesting meaning as it implies that the employees are not permanently sent home, but can be recalled back to work if the markets show they are picking and getting back to normal. This issue is one tough blow for employees, and they must be aware and ready for it when the markets dim. This process, however, should be done in a simplified way that will help employees recover from the shock. Companies that use this way of downsizing should make use of it to establish their presence in the market.

There are a couple of reasons why this aspect happens. Part of these reasons is when a company combines and accepts to merge with another. This happens when corporations become a single company and has to achieve the sole role of being in the market deemed to be profitable. The employees have to be trimmed to ensure the company operates smoothly. If a company is bought by another, then the aspect of downsizing may occur as well. In the case of change, this may also happens when a new management is put in place.

The Implications of Downsizing

Downsizing has been felt recently by the banking industry as it is explained in the article by Reuters which says that almost about 160,000 jobs have been terminated. It means that this process is likely to continue amidst objections. This process has been taken as a measure because the industry tries to restructure well. This as explained implies that many in Europe continue facing this as compared to Asia and America which faces lower cut offs. As explained by Reuters, Britain is going to be the worst hit as finance is what has grown the economy. The aspect of downsizing is going to affect the economy which currently is facing recession.It is going to have various effects to those who face this situation (Garber, & Peter. 2008).

Some of the effects that employees face include moral degradation that really ends their career.Employees enter to a statewhen they feel they are useless and incapable to yield results.This aspect brings emotional degradation to employees who faces great danger in the progress of his/her career and makes them think that they are not able to deliver the required results that the company aspired for.Downsizing also makes employees feel that they have no future and that they can never produce. This issue should be dealt with beforehand,in order to make the employeesaware of what is to happen.

There is also another aspect and condition that the other employees suffer from. The remaining staff will suffer from a syndrome of reduced confidence. This is a syndrome which will walk through each employee as they try to figure out what else to do. This issue makes the rest of the employees view the company as one with no future and in fear of being cut down anytime.Such stress lowers their job security hopes and reduces the chances of better confidence needed to run the affairs of the company.

This aspect also results to negative thoughts among employees as they start to lose hope that the company will remain in its best performancesandstart looking for better places to offer their services.This becomes a point of conflict as many thinks that they may lose their jobs in and have their careers terminated.Downsizing also affectsmanagement as poor results can be expected after this exercise comes to a conclusion. This also makes the employees’ view that the exercise may lead to proposed negative results and that the company is never going to perform better.

The employees left after downsizing, seems to battle a lot including the future of their careers.Employees may see that their shining careers may be terminated in an unprecedented manner. This makes employee live fearing for their careers. The exercise of downsizing creates a major effect in the career of each employee. This is the aspect that the remaining employees suffer from affecting the company.Downsizing demoralizes the careers and confidence of many individuals.

Downsizing is an aspect that can have a great impact to the employee. This makes the employee get to physiological conditions as they have to come to terms with all that is happening. This aspect can lead to various diseases arising from this mental stress. Psychological torture is one aspect which the employee may suffer and may affect them. This is a problem that may take as much time possible to heal. This affects the working rate of the employee and may fail to produce and yield results if they find another job elsewhere. These conditions can lead the employee to contracting various diseases. In special cases, the employee may suffer from shock thus may lead them to be insane.Downsizing should be handled with care to avoid these issues (Cappelli,& National Bureau of Economic Research. 2000).

Employees who are left after downsizing are met by circumstances that include workload. These employees always claim to be inflicted with much more workload whichis unbearable to handle. This is a problem as they have to cover the workload of those employees who are terminated.The employees left have to do the work that the terminated employees did. This aspect has made employees work more to cover-up the work a factor disapproved by many employees. This cover-up makes the employee unable to reach the targets set forth by the company. This aspect also plays a role in ill health of various surviving employees who view themselves liable to the same exercise incase worse times are experienced.

The effect of downsizing has a significant role in the lives of employees who face termination and those who do not face termination. The employee who faces termination is one who suffers the considerable effect. This aspect affects their families also a factor that is hard to fill. Employees may lack the courage to face the family as this would only bring fights. This aspect is one which is recorded in many families who fight and one that is very difficult to deal with. Employees find it hard conversing with their children and also their relatives. These fights may lead to terrible break ups among family members (Deal, & Kennedy, 1999).

The problem of psychological torture that employee suffers is one which may find its way to the other family members. This is attributed to the fact that the members have to think of a way to end their crisis and also a way in which they can help ease the situation. This makes the family wonderabout their life as they find it headed to the drift and easily washed away by these problems. This problem can make children deteriorate in their exams and performances due to this condition. This condition is one which may see the family admitted to hospital as they battle out diseases brought about by the shock suffered from downsizing. This problem is one which can make the employee suffer from many complications which may be unbearable for them leading to extended time before they recover.. This aspect may also affect the growth of little children who are in the family.

Downsizing can affect the employee’s income levels leading to various conditions. This aspect has considerable effects to the family which has to struggle through thick and thin to survive using the little that they have. This aspect makes the family live under tight constrains from the little finances got. This really becomes a set back to the family. This is a tough time to cope with the problems affecting the family considerably. This aspect comes with various aspects like frustration and the employee feel frustrated to work for any other company. This makes the person lose faith making them become dependent. This frustrates the employee who turns to doing other things which will damage the employee enhancing tension in the family leading to chaos and fights (Pfann, & Salvanes, 2001).

The effects of downsizing are ones which affect the family in the aspect that the employee who faces this measure becomes attached to certain implication. The stress obtained from this measure can make the employee to enter into different aspects which may turn to addiction. This may affect the way the employee functions and works. This deteriorates the spirits of the employee. This also affects the family as it has to struggle to help the employee recover from this stress. This is a tough blow which the family has to undertake under serious conditions.

The measure of downsizing affects the community. The community may include the company in general and the society at large.Downsizing affects the employees who are left in the working place. The employees left after downsizing, seems to battle against the future of their careers. These employees may see their careers terminated in an unprecedented manner. This makes the employee live fearing for their careers. The exercise of downsizing creates a major effect in the career of each employee. This is the aspect that the remaining employees suffer from. This means that the company may be affected. This aspect is one which demoralizes the careers and confidence of many individuals.

The employees left lack hopes that the company will continue to perform making the employees start looking for better places to offer their services affecting  the employees future in working in that company. This becomes a point of conflict as many thinks that they may lose their jobs in the same way and their careers terminated. This aspect is one which does not auger well with the management as poor results can be expected after downsizing. This makes the employees lose hope in the future aspects and prospects of the company and should be handled in a compromised way.

The company is also affected assome of its factors like technology aspects may deteriorate. The current company may sack employees who had the experience in technology aspect. This has a greater impact on the updates that were made technologically. This may lead to various conflicts between the employees left who may handle the sector in an unprecedented manner. This is an aspect which should be looked upon by the company to ensure that they get the right aspects for the company. The company may also fail to achieve its projects set for completion as the left employee face various issues. This is an aspect that may make some of the projects to be suspended or completely left undone. This inflicts some issues to the company.

The company amidst taking this step to reduce its workforce to ensure it achieves maximum profit may get several setbacks. Another setback that this company would face is communication. The left employees may find it hard to ask for any communication after the issues. This may lead to inappropriate information which may become a factor of non-understanding with each other. This aspect inflicts pain to the company where the normal flow of information may be affected and this would lead to a setback to the company. This measure may also have a serious problem to the exchange that involves ideas in the company. This is based on the fact that employees find it hard to enter into new friendship which may later be cut off.

The other aspect that is associated with the downsizing measure is that there may be loss of knowledge and skills. This is an area that is affected by the whole project. This may make the company go a long way to find and employ other people to fill this space. Some of the operations may go unattended to and this may have an impact to the company. The other setback that the company can suffer from is that this aspect tarnishes the image of the company. This makes the customers to have a bad feeling about the operations that will be offered by the company. This will make many customers go and find better services elsewhere. This aspect also affects the perspective that existing employees will be left with. This lowers their working rate and all what they do (Tomasko, 1990).

Conclusion

The practice of downsizing is one that is becoming increasingly a tool to achieve the best performance when times hit low. In every human resource department, this aspect has to be practiced. The company must take and use all means within their power to ensure that they retain and maintain the stability of their firms in the market. Companies should be very cautious as they undertake this process as it may have a negative impact to the company. Managers should be very cautious when they take this process.

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