Platt Perspective on Business and Technology

Downsizing and mass lay-offs as a symptom of strategic failure

Posted in HR and personnel, strategy and planning by Timothy Platt on May 15, 2010

Yesterday I posted a note on workforce reductions and with a focus on lay-offs. I have been thinking about this issue a great deal lately as many if not most of the people who are currently looking for new jobs are looking because of the way they were caught up in these staffing cutbacks. I wrote and posted this note because so many of these cutbacks are done so poorly and with so little understanding of the potential for trauma they create, and both to staff members let go and to those who remain – and to the business and its long term prospects as well. So I wrote this with a focus on moving beyond simply considering short term payroll costs reductions. This is an event that has long term risk management and other consequences as well, and to the company doing this and through ripple effects throughout their supply chains and value chains.

Sometimes a business is legitimately blind-sided by the unexpected and finds itself in need of taking extreme measures to even just survive, let alone thrive and remain positively competitive. All too often, however, a retrospective review of what lead up to a downsizing reveals much was done that made it inevitable with poor planning and execution and with lack of appreciation of true priorities. Very often such a review highlights important decisions not made and actions not taken too, the absence of which caused long term problems as well. When good, productive staff members are laid off that is almost always at least in significant part because of failure of leadership to effectively lead.

I posted on this yesterday from the perspective of “its going to happen so how can it be done better?” but I wanted to post at least a brief follow-up note on this, as to the importance of making sure this is not needed.

I know from feedback I have received that this initial posting upset some of my readers and I understand why, as downsizing is a very sensitive topic for many. I have been caught up in this too so I write from personal experience. But simply saying this is damaging to those so affected cannot be enough. I wanted to share something of what I have learned about this option to help organizations better think them through so if they have to do this they at least limit the damage – and to themselves and their organizations too.

And I add for job seekers that one lesson from this is that if you get caught up in a downsizing it really isn’t about you and it did not happen because of you or your contribution to the company. I have lost track of the number of times I hear of companies that simply lay off by quotas where every department and service has to find its percentage of heads to roll and regardless of the importance of those specific employees to the company and its bottom line. That is the opposite of reason and planning and the opposite of what I wrote of in my earlier posting on this.

So I write this and post it to help clarify the record and to put my earlier posting in perspective. And in this, popular or not I will always seek to provide accurate and useful information, and both for businesses and for their employees and for those looking for work opportunities.

Tim Platt

3 Responses

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  1. Mary Aucoin Kaarto said, on May 16, 2010 at 5:19 pm

    Thanks for writing such a timely article and one that offers what the world – especially those who are laid off – needs more of: compassion, empathy and affirmation that nine chances out of 10, they did nothing to deserve the loss of their job and everything that entails.

    I’ve learned from two separate layoff experiences – each lasting two years, all as a single mother – that a layoff can be one of the best things that ever happens to an individual, depending on their response once they get over the initial shock. And, it’s absolutely possible to live a joyful, peaceful life in spite of one’s circumstances. There are so many benefits to being laid off, people just need to look for them in ways that matter.

    Is it exciting and fun to be laid off? Of course not – I’m not demeaning what these people are going through. When someone “goes through” something, they must know it will not last forever.

    If you or anyone you know is laid off and would like someone to talk to, please feel free to email me.

    • Timothy Platt said, on May 16, 2010 at 8:38 pm

      Thank you Mary, for your kind words and for your offer to network with others who have been experiencing the consequences of downsizing.

      You are right that getting caught in a downsizing can lead to new opportunity, if for no other reason than the fact that being laid off that way can force us to more fully consider our options, and our best possible paths for living up to our potential. You are also right that this is a process that can be very painful as we are pushed out of our familiar paths and into uncertainty – financial uncertainty definitely included where we can find ourselves watching our investments disappear along with our self-esteem.

      Networking with others is very important. Good networking contacts can be like a lifeline in times of need. So thank you and I ask anyone who reads this who is looking to reach out to your network and anyone who has gone through this to reach out to your network too. The shared strength in that can help make all the difference for the good and for people who need and deserve good things to happen.

      Tim Platt

  2. […] less than functional approach that I mentioned in a recent posting on downsizing as a process with Downsizing and Mass Lay-Offs as a Symptom of Strategic Failure. There I posted on a context where social pressures can come to a head catastrophically in shaping […]

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