Downsizing

Downsizing is the process of reducing the number of workers in an organization. The following are some of the reasons why companies use downsizing:

• Terminate the unproductive workers.

• Maintain the profitability if the company.

• When a company product or service is cut.

• Poor economic condition.

• Introduction of new technology.

• Increase of competition in the market.

• Merging and acquisitions.

What is Downsizing? Reasons Why Companies Downsize ...(2018). Retrieved from https://binged.it/21OreLr  

There are many changes which occur in the workplace after downsizing. We will discuss some of them below.

Affecting morale of Employees

Employees are the first one to be affected as a result of downsizing. Departing employees might face financial problem or their mental well being. Current employees will have greater work load and other responsibilities. Employees will always have the stress and will worry who will be terminated next.

Financial Cost

Organizations have to provide terminating employees with severance packages and other benefits depending on different criteria. The company will have more salary expenses for current employees. There might also be other expenses for the recruitment and selection process in case they are hiring.

Decrease in the productivity and creativity 

 As a result of downsizing, current employees tend to be less efficient at work. They will not give new ideas or make creative moves in the workplace. This is because they might think they too will be terminated or they may be getting a new job. This result in lower productivity in the organization.

Please visit this link to get more information on the impact of downsizing in the workplace.

This video will give you more information on the negative effect of downsizing.

[ehowfinance].(2012,August,12).Negative Effects of Corporate Downsizing : Team Building & Human Resource Strategies.Retrieved from https://www.youtube.com/watch?v=9KPxuy7lvNg

I would like to hear your thoughts. Please leave a comment below.

References

[ehowfinance].(2012,August,12).Negative Effects of Corporate Downsizing : Team Building & Human Resource Strategies.Retrieved from https://www.youtube.com/watch?v=9KPxuy7lvNg

What is Downsizing? Reasons Why Companies Downsize ...(2018). Retrieved from https://binged.it/21OreLr  

MacDonald, L. (2018). Chron. Retrieved from The Positive and Negative Effects of Downsizing on Departing Employees: http://smallbusiness.chron.com/positive-negative-effects-downsizing-departing-employees-34813.html

Frost, S. (2018). The Disadvantages of Corporate Downsizing. Retrieved from Chron: http://smallbusiness.chron.com/disadvantages-corporate-downsizing-20390.html