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A downsizing strategy refers to the planned elimination of positions or jobs in a company as part of a strategic initiative to improve efficiency, productivity, or profitability.
- Keep It Legal. It may be obvious, but one of the most important considerations in any downsizing exercise is your legal position. Depending on where you’re based, you may be subject to a range of legal requirements before you can downsize a business.
- Consider Asking for Volunteers. It may sound funny, but some of your employees could actually be happy to lose their jobs. There are likely to be some people in your organization who would like to change careers, start their own businesses, or go back to school.
- Focus on Departments. Another effective approach for strategic business downsizing is to focus on specific departments while ringfencing others. One way to do this is by using a little bit of common sense.
- Create a Dynamic Selection Criteria. A more in-depth strategy for selecting staff for layoffs is to create a list of different criteria and score each staff member based on these.
Mar 8, 2024 · It's crucial to provide employees with clear, honest information about the situation, the reasons behind the potential downsizing or layoff and the potential impact on the organization.
- Fundamental Market Changes
- Profit Segmentation
- Rightsizing
As I’ve written about before, the phenomenal growth of giant digital competitors occurred along a relatively narrow strategic path: Arm’s-length services to small customers. These companies became experts in efficiently serving the needs of the “long tail” of small customers, which most businesses took for granted. This means that incumbent compani...
When companies use new, granular, transaction-based metrics and analytics (creating an all-in P&L for every invoice line), they can quickly see that their customers (and products) fall into three broad profit segments: “Profit peaks,” their high-revenue, high-profit customers (typically about 20% of the customers that generate 150% of their profits...
As companies emerge from the pandemic, they face a changed world. In the past, they could win by selling to a broad market in a one-size-fits-all way. Today, they have to understand their profit-based customer segments and organize to provide the right services to the right customers in the right way. This involves adapting your organization and ma...
Aug 17, 2021 · Based on a review of 44 empirical articles, the paper advances a framework for responsible downsizing. The framework establishes four types of responsibility: regulatory, procedural, communication and employment responsibilities.
- Christopher J. McLachlan
- 2021
Sep 22, 2023 · Downsizing well requires fairness and legal compliance, as well as maintaining customer confidence and employee morale and safeguarding the reputation of the employer brand. It’s imperative management and senior teams prioritise compassionate leadership and effective message delivery and ensure a fair process is maintained.
Downsizing has always been a popular practice in the corporate world - even for firms not in distress. But today, with many companies in distress, downsizing...
