1. How to Manage Downsizing and Layoffs
Slide Show Notes
Business and economic conditions sometimes require downsizing and laying off a significant number of employees. No one likes to do this. But competitive pressures, weak markets for products and services, or the need to streamline operations for greater efficiency may leave an organization no other choice.
Downsizing and layoffs are difficult not only for you and the employees who lose their jobs but also for the survivors—the employees who remain after the layoff.
Effective implementation of downsizing plans as well as successful recovery from layoffs depends in large part on your leadership and commitment to meet the challenges and overcome the obstacles that arise in the wake of downsizing and layoffs.

2. Session Objectives You will be able to:
Recognize the full impact of downsizing and layoffs
Understand the legal implications
Help both laid-off workers and remaining employees cope with the situation
Rebuild your team to face new challenges and opportunities
Slide Show Notes
The main objective of this session is to provide you with the information and strategies you need to help navigate successfully through a period of downsizing and layoffs and the subsequent recovery and renewal of the organization. By the time this session is over, you should be able to:
Recognize the full impact of downsizing and layoffs;
Understand the legal implications;
Help both laid-off workers and remaining employees cope with the situation; and
Rebuild your team to face new challenges and opportunities.

3. What You Need to Know Workforce reduction policies and procedures
The effects of downsizing and layoffs
How to minimize the negative impact of layoffs
How to help restore confidence and trust
Why it’s important to focus on future plans and career development
How to redesign work and reorganize your department to meet future challenges
Slide Show Notes
During the session, we’ll discuss:
Workforce reduction policies and procedures;
The effects of downsizing and layoffs;
How to minimize the negative impact of layoffs;
How to help restore confidence and trust;
Why it’s important to focus on future plans and career development; and
How to redesign work and reorganize your department to meet future challenges.
Are you familiar with the organization’s workforce reduction policies and procedures?
Briefly review your organization’s workforce reduction policies and procedures.

4. Impact of Downsizing And Layoffs
Laid-off employees
Their families
Employees who remain
Slide Show Notes
Downsizing and layoffs have a broad impact. Many people, both inside and outside an organization, are affected. The biggest and most immediate impact, of course, is on the employees who are laid off. They lose their jobs and their incomes. In many cases, people in these circumstances also lose self-esteem and self-confidence.
The families of laid-off workers are also hit hard. Family income is suddenly reduced. Important benefits such as health insurance that were once covered, or partially covered, by the company must now be paid for entirely by the laid-off employee. In addition, families of laid-off workers share the anxiety and other upsetting feelings with which their unemployed family member is struggling.
Employees who remain after a layoff are also affected. They may have conflicting feelings—glad they still have their jobs but sad about the loss of their friends and co-workers. They may have serious trust issues with the organization. Furthermore, they are now fewer in number and have more work to do, which might not make them very happy either.

5. Impact of Downsizing And Layoffs (cont.)
Managers and supervisors
The organization
The community
Slide Show Notes
Managers and supervisors who survive layoffs are also affected. They must now lead their remaining employees through tough times and rally them to meet new and difficult challenges. All the while, they are likely to be dealing with strong emotions of their own about the layoffs and the increased pressure to maintain standards and productivity with fewer employees.
Downsizing is usually a response to difficult business conditions. An organization that finds it necessary to lay off workers may be an organization facing challenging times financially. Its survival may depend on successfully regrouping and reorganizing to remain competitive and profitable.
Finally, the community in which a company operates may be shaken by layoffs. There might be a domino effect. Laid-off workers have less money to spend and, as a result, community businesses feel the pinch. In really bad economic times, some small businesses in the community might fail as a result of a big layoff by a major area employer.
Think about any experiences you’ve had with downsizing and layoffs. What was the impact? Who was affected and how?
Discuss examples of layoffs in your workplace and their impact on the workplace, supervisors, employees, and others.

6. Legal Requirements: Notice of Mass Layoffs
WARN
Notice requirements
Union and nonunion employees
Exemptions
Slide Show Notes
Downsizing and layoffs also raise legal issues. The federal Worker Adjustment and Retraining Notification Act, known as WARN, applies to companies with 100 or more full-time workers or 100 or more employees who regularly work a combined total of 4,000 nonovertime hours a week.
WARN requires those employers to give employees and appropriate state and local officials 60 days’ notice of mass layoffs or plant closings expected to last at least 6 months. Mass layoffs are defined as at least 33 percent reduction in workforce or the layoff of 500 employees within a 30-day period.
WARN also requires employers of unionized employees to give the union 60 days’ notice when any of their members will be laid off. Nonunion employees must receive individual notice in their paychecks or mailed to their homes.
Employers may be exempt from the notice requirements, however, if the layoff lasts less than 6 months or if it involves failed efforts to get new capital or business, unforeseeable adverse business conditions, natural disaster, or an employee lockout due to a labor dispute.
Some states have laws similar to WARN, and some of those laws may have additional requirements.

7. Legal Requirements: Discrimination
Rely on objective, business-related criteria
Document selection criteria for each employee
Follow established seniority systems
Slide Show Notes
Discrimination is another legal issue that must be considered in times of downsizing and layoffs. Federal and state laws prohibit discrimination based on race, color, religion, age, national origin, sex, or disability. And so do state fair employment laws.
To prevent discrimination charges, you should rely on objective, business-related criteria when selecting employees for layoff. In other words, focus on the job and the work, not on the individual. Elimination of an employee’s job due to necessary cutbacks, for example, is an objective, business-related reason for selecting that employee for layoff. Choosing all your older workers for layoff, on the other hand, would likely be considered age discrimination and could lead to a costly lawsuit.
Also, be sure to document selection criteria for each employee laid off. If your decision is ever challenged, these written records will help defend your selection process against discrimination charges.
Layoff selections that follow established seniority systems are usually considered nondiscriminatory. When you can’t make selections based on job-related criteria, then seniority is a reasonable alternative.

8. Benefits and Services For Laid-Off Workers
Severance packages
Vacation pay
Health insurance
Outplacement service
Opportunities for future rehire
Slide Show Notes
Along with taking legal considerations into account, you also want to make sure that employees who are scheduled for layoff are aware of the benefits and services available for helping them during this difficult time. For example, they may be eligible for severance pay.
Or they may have accumulated vacation time for which they should be paid.
Under the federal law known as COBRA, or the Consolidated Omnibus Budget Reconciliation Act, laid-off workers are entitled to continue health insurance coverage for themselves and their families for up to 18 months in most cases. Employees should understand, however, that they have to pay the entire monthly premium themselves.
Employees who lose their jobs should also be aware of any outplacement services available through the company or the state, and they should be encouraged to take advantage of these opportunities.
If there’s a chance laid-off workers may be rehired, let them know and suggest they keep in touch. But be honest. Don’t hold out false hopes. It’s better to let people get on with their lives than wait around for something that may never happen.
Think about other benefits and services that might be available.
Identify other benefits and services available to laid-off workers—for example, 401(k) benefits.

9. Communication with Laid-Off Workers
Layoff plans
Layoff schedule
Reason for layoffs
Information vs. rumors
Honesty
Slide Show Notes
You can also help employees who have been selected for layoff by keeping them up to date on information concerning their futures.
Tell employees about layoff plans as soon as possible. And let them know the details of the layoff schedule as soon as you can, too.
Be sure to inform employees of the reason for the layoff. The more they know, the more they are likely to accept the situation.
Which brings up another important point. You want the information employees receive about layoffs to be complete and accurate. You want that information to come from the workplace, not the rumor mill, which is likely to generate misinformation and negative feelings. When rumors are circulating, pay attention and respond promptly with real information.
And remember, in these situations honesty is always the best policy. Trying to save people’s feelings with half-truths and wishful thinking make a bad situation worse. Tell it like it is. If you don’t know the answer to a question about the layoffs, say so. And then try to find out from your boss or HR.

10. Communication with Laid-Off Workers (cont.)
Respect
Tact
Empathy
Support
Detachment
Slide Show Notes
Maintaining positive communication with laid-off workers also involves an emotional aspect. Many of these employees are likely to be upset and worried. Some may be angry at the workplace or blame you for the loss of their job. It’s a difficult time for them—and a difficult time for you.
During this difficult time, continue to treat these workers with respect and allow them to end their tenure with dignity.
Also be tactful. Continue to interact with them as before. Don’t ignore them. They still have work to do, and they still need you to take an interest and supervise their work as you’ve always done.
Try to put yourself in their shoes and think about how they must feel. Empathize with their situation.
Offer them whatever support you can. Sometimes that means just listening. Sometimes that’s all you can do. It may not seem like much, but your support will be appreciated.
At the same time, on another level, it’s important to remain as detached as possible. This doesn’t mean being uncaring. It means not taking things personally. It’s not your fault these people are being laid off. Try to keep a professional perspective and some emotional distance.

11. Managing Survivors Stress Guilt Resentment Concern Slide Show Notes
Now let’s turn our attention to the employees who remain after a layoff. Although it’s easy to see how people who lose their job could be upset, it might not be so easy to realize that the survivors are probably also suffering as a result of the layoff.
Survivors of a layoff are likely to feel a lot of stress. They are likely to be upset and uncertain about the future. Some may be so upset that their work could be adversely affected.
Survivors might also feel guilty about still having a job while their co-workers are unemployed.
They might feel resentment, too, blaming you and the workplace rather than economic conditions for the situation. In addition, they might resent the fact that now they have to work harder to keep up productivity with fewer people to share the workload.
And most of them are likely to be concerned about their futures. Will this be the end of it, or will there be more layoffs? While they once might have felt secure in their jobs, now they’re not so sure. Some may have serious doubts about their future with the company.
Think about how you would feel in this situation. Maybe you’ve already had the experience. How did it feel?
Ask trainees to talk about how it might feel to survive a layoff.

12. The Loss Response Uncertainty and anxiety Denial and isolation Anger
Slide Show Notes
Experts who have studied corporate downsizing say that employees who remain after a layoff experience a very real psychological reaction known as the “loss response.” Not all people pass through the stages of the loss response at the same time or with the same intensity, but all are affected to some extent. It’s important to understand the loss response because there is a direct relationship between these stages and employee productivity, morale, and self-esteem.
According to this model, workers who remain after a layoff may at first feel uncertainty and anxiety. They don’t know for sure what the future holds. The whole experience has shaken their confidence and trust.
This initial stage is often followed by denial and self-isolation. Some workers are too stunned to react openly, and some supervisors may be reluctant to deal with the confused and uncomfortable feelings of their employees. Nearly everyone is trying to escape from the situation.
Angry feelings among survivors are also common. They may be angry that their co-workers have been displaced, that relationships have been broken, and that they are left to cope with unwanted change. Supervisors may feel angry at having to do the “dirty work” or guilty that their employees’ upset feelings are partly their fault.

13. The Loss Response (cont.)
Survival response
Depression
Acceptance
Slide Show Notes
Survivors of a layoff might also engage in basic, even unconscious, survival responses. For example, they might feel they will be more secure if they work harder or keep their heads down and avoid taking initiative.
It’s also common for employees who remain after a layoff to feel depressed. During this phase, the low point of the loss response, employees may become cynical and have very low morale, which might be reflected in higher absenteeism and reduced productivity. During this phase, supervisors might question their leadership qualities and their ability to motivate their employees.
Eventually comes acceptance. Survivors form new relationships at work and refocus on current projects. But be aware that all of this takes time. You won’t reach this stage right away. And you can’t force the issue. Nature has to take its course. But it’s good to know, anyway, that eventually you’ll get past it all.

14. Coping with the Upheaval
Do you understand the information that has been presented so far?
Slide Show Notes
Now it’s time to ask yourself if you understand the information that has been presented so far. Do you understand what we’ve discussed about the impact of downsizing and layoffs? About the legal issues? About helping laid-off workers and surviving employees cope with the situation?
It’s important that you understand this information, because your effectiveness in the event of a layoff will depend on your knowledge of these issues.
Answer any questions trainees have about the information in the previous slides.
Conduct an exercise, if appropriate.
Now let’s continue to the next slide where we’ll talk about maintaining morale early in the change process brought on by downsizing.

15. Maintaining Morale Early In the Change Process
Visibility and availability
Closure
Patience
Slide Show Notes
The first few weeks and months after a layoff are critical times. If wounds are to heal and order is to be restored to your department, you must make a determined effort to shore up sagging morale during this difficult time.
One of the most effective steps you can take is to be visible and available to your employees. Visibility is reassuring. If you go into hiding, employees will think you know things you can’t share. Availability is also important. Your employees need you now probably more than ever before. Keep you door open, and make as much time as possible to interact with employees.
You should also help provide closure—to help bring the whole downsizing process to an appropriate end so that you can continue with the challenge of rebuilding. Don’t try to ignore what’s happened or rush employees through the closure process.
Be patient, and give remaining employees a chance to say their good-byes to the past and prepare to face the future with a positive attitude.

16. Maintaining Morale Early In the Change Process (cont.)
Open communication
Respect
Discretion
Slide Show Notes
Be open and provide as much useful information as you can about what will happen now after the downsizing. Try to give your employees an accurate picture of what is happening in the organization and why. At this time, you will have to work at maintaining your employees’ trust and confidence in you.
Be respectful as well as open. Show respect for employees’ feelings and concerns, even if you don’t share them or think they are not really warranted. Also show respect for the organization and senior management. Bad-mouthing management to gain acceptance with employees is a bad idea.
Finally, be discreet. Stick to the facts. Don’t speculate on the company’s motivations and don’t discuss why certain individuals were selected for layoff. This could lead to legal problems if discrimination charges were to be filed and the selection process were to be brought into question.
What else could you do to maintain morale following layoffs?
Ask trainees to suggest other steps they could take—or have taken—to maintain morale among their employees during this difficult time.

17. Rebuilding the Team Group meetings Information Planning Standards
Slide Show Notes
At the same time as you are dealing with the emotional fallout from a layoff, you have to start rebuilding your team. Your employees need to know that they are still part of a goal-oriented, cohesive group.
Hold frequent meetings with employees in the weeks and months following a layoff. Bring them all together for problem-solving and decision-making sessions. Group meetings help promote a feeling of teamwork and allegiance to the newly re-formed group.
Use meetings and other opportunities to provide workers with a steady flow of information. Keeping employees informed helps quell rumors and anxiety. It also helps rebuild trust and a sense of belonging.
Also focus the group’s attention on planning, and get them involved in the planning process. The sooner employees stop living in the past and become future oriented, the sooner they will come together as a team again, and morale and productivity will both start to rise.
And don’t forget to follow through at this critical time and maintain high standards and expectations. Showing that you still care about quality and employee performance shows your respect for the organization, your department, your employees, and yourself. All of this will help put the past to rest and prepare employees for the future.

18. Focusing on the Future Vision Renewed commitment Shared mission
Slide Show Notes
Assuming a leadership role in the renewal process means focusing on the future. As a leader, you need to help create a vision of the future for your department and the organization. To be productive and perform well, employees need to have direction and a clear sense of what they are supposed to achieve.
You also want to instill in employees a renewed sense of commitment to the job, to the workplace, and to you as their leader. Don’t expect this to happen overnight. But if your vision is clear and your leadership is consistent, it will happen.
Together, you and your employees will create a new mission for your department, one that addresses the realities and the challenges that the group and the larger organization will face in the years ahead.
What else can you do to focus employees’ attention on the future and help them move on, leaving the trauma of the layoffs behind them?
Ask trainees to suggest other ways they could focus employees’ attention on the future following a layoff.

19. Career Development Retention of key personnel
Individual needs and potential
New directions
New place in the organization
Slide Show Notes
During this time, it’s important to pay attention to your employees’ career development. Skill, knowledge, and experience building is another good way to redirect employees’ attention and energies toward future challenges and opportunities.
An emphasis on career development is crucial because this is a dangerous time for you and the company. Some employees, not trusting their future with the workplace, might start looking for employment elsewhere. Since you’ve just lost employees, you don’t want to lose any more—especially since the most likely to jump ship are your key people, the employees who can most easily attract job offers.
Awareness of individual needs and potential should, therefore, go hand in hand with group activity. Help employees reassess their career plans in light of a leaner and reorganized workplace.
Help them find new directions and let go of a tendency to identify with old titles and roles, which may no longer exist or are due for elimination after a post-downsizing reorganization.
Help them gain a new understanding of their potential and their new place in the organization and find a new career path, if necessary.

20. Collaborative Work Redesign
Employee involvement
Empowerment
Increased understanding of the organization
Greater commitment
Productivity and quality
Time frame
Slide Show Notes
Rebuilding after a layoff also involves addressing operational changes resulting from the workforce reduction. You will probably be expected to maintain or increase production goals with fewer employees. This often involves redesigning the way employees work.
Getting employees involved in this work redesign process helps them focus on the work itself and how it can best be done, instead of their own fear and anger.
It also gives them a sense of choice and power, which helps them overcome feelings of helplessness and lack of confidence.
Collaborative work redesign also increases employees’ understanding of how the organization works and possible areas for personal growth within the workplace.
It increases commitment to the newly structured organization and its new goals as well.
All of these things help you bring productivity back to expected levels and maintain quality standards despite difficult circumstances and a reduced workforce.
And one last point. Recognize that employees will need time to adjust to new tasks and structure. Don’t expect them to settle into redesigned jobs right away.

21. Organizing Assignments With Morale in Mind
Performance standards
Short-term goals
Positive reinforcement
Roles and status
Rewards and recognition
Slide Show Notes
Finally, to recover from the effects of downsizing and layoffs, you must organize job assignments with morale, as well as productivity and quality, in mind.
To do this, establish clear performance standards to avoid any sense of drift or apathy among employees.
For a while, you may decide to confine yourself to setting short-term goals rather than overwhelming your people with a longer term expectations. You can start emphasizing long-term goals once stability returns to the department.
Another effective way to enhance morale is to choose tasks or goals with a strong likelihood of success. This kind of positive reinforcement boosts self-esteem and self-confidence, and gets your employees back into play more quickly.
Also, be sensitive to roles and status. Some employees may be assuming new roles. Some of them may have lost status due to the downsizing. Be sure to identify and address these issues, giving your people the time and space to adjust to their new roles.
And last, but not least, be sure to recognize and celebrate success in some fashion. Reward employees for their effort and cooperation. This has been a tough time. Make sure your employees know how much you appreciate them.

22. Recovery and Renewal
Do you understand the information presented in the previous slides?
Slide Show Notes
Do you understand of the information that has been presented in the previous slides? All of this information will help you rebuild your team and prepare employees to face the challenges of their new future in your department and with your workplace.
Answer any questions trainees have about the information presented in the previous slides.
Conduct an exercise, if appropriate.
Now let’s conclude the session with some key points to remember.

23. Key Points to Remember
Periods of downsizing and layoffs are difficult for everyone
You play a critical role in helping both laid-off workers and remaining employees cope
Your leadership is also crucial in rebuilding your team and the organization to face new challenges and opportunities
Slide Show Notes
Here are the main points to remember from this session on downsizing and layoffs:
Periods of downsizing and layoffs are difficult for everyone;
You play a critical role in helping both laid-off workers and remaining employees cope with this difficult situation; and
Your leadership is also crucial in rebuilding your team and the organization to face new challenges and opportunities.
This concludes the downsizing and layoffs training session.
Give trainees the quiz, if appropriate.