May 31, 2018
Positive & Negative Effects of Downsizing on Employees
Amid the current economic crisis, many companies are tending to reduce the number of people they employ in an attempt to reduce the costs they incur or as a result of a merge or an acquisition. Companies may also be subject to external financial pressures or increased competition, which force them to lay off some of their work power.
After taking the final decision to downsize, the company sets objective criteria to make its decision to avoid any discrimination; these criteria vary between the service duration, the needed skills, the disciplinary records or the high/low salaries.
The main negative effect of downsizing is the financial impact; the employees may have loans to settle, rents to pay or specific dues to cover.
Departing employees may also feel that they are not treated fairly and that they should be highly rewarded for working hard. When being chosen among the employees to be departed, some employees lose confidence in their capacities and skills, and start suspecting their capacities, which could also lead to losing trust in all future employers.
On the other hand, some people tend to look at the filled part of the cup, and consider their departure from a job due to the company’s downsizing policy, a chance to start a new phase, a chance for a new challenge, and a new experience. This incident may be the push the employee needs to get out of the rut of job security and seek a more rewarding role.
Considering that being part of a downsizing experience is something you cannot reverse, better to look at the bright side of things. Try to take advantage of the financial compensation you get and arrange your expenses accordingly in a way that they last you until you find another job. Try also to look at the positive part and reinvest your qualities, skills and know how to rebuild a successful working experience.
The Business Lobby Team