How to Downsize Your Company While Keeping the Same Productivity

Layoffs have become most companies’ default response to the challenges created by global competition, advancements in technology, etc. These days, organizations are considering downsizing as a strategy to survive economic recessions.

According to a study, job cuts rarely help companies achieve their goals. They are often done for short-term gain, but the cost savings get overshadowed by the loss of knowledge, bad publicity, higher voluntary turnover, lower innovation, and weakened engagements.

Simply cutting payroll with no strategic plan to improve productivity and efficiency can doom many downsized companies. It may demoralize employees, reduce productivity, and lead to shrinking income.

The problem is that finance people look at the numbers rather than think of the business as a system. In doing so, companies get these long-term, unintended consequences because they thought of a complex system too simplistically.

It’s highly recommended to get into contracts with your workforce where all work-related matters are highlighted and described. To save your time and protect your rights, CocoSign has 80+ agreement templates to suit your needs.

Let’s see how managers can plan staff reductions to cut costs without sending their companies into a potential “death spiral”.

Tips to Minimize the Disruption and Negative Effects of Downsizing

Deciding to downsize your company’s workforce isn’t easy undertaking. Nonetheless, laying off a large percentage of your staff could cause a huge disruption to your business if not handled properly.

When downsizing a business and wanting to retain the same productivity, you must become proactive and look at the long-term goals and problems. Outside factors can also easily impact employee productivity, from the economic and political climate to stress and lack of sleep.

Employers may not control what workers do at home or the external factors beyond their collective control. However, they can act to ensure high productivity if they know a particular distracting event may be on the horizon or when in the midst of a crisis.

Most successful approaches start with a philosophy spelling out the company’s commitments and priorities. In most cases, companies will use contracts. If you need easier ways to complete and sign contract forms, check this form agreement online or visit our website for a vast collection for all your business needs.


Next is to establish ways for exploring layoff alternatives and determine options for three cases: a healthy present, short-term volatility, and an uncertain future. 

Here are better ways of handling the changing workforce needs that make sparing use of staff reductions and making sure that if they happen, the procedure feels fair and those affected get a soft landing:

1. Be Transparent

Transparency is essential when people are laid off, and a company’s downsizing plans are in motion. One of the best ways to be real with your team is through holding group meetings to let them know about the downsizing plans and explain why it was the best option.

By keeping a transparent relationship, there will be reduced rumors that may create worries and distract your daily business activities. If employees aren’t trying to guess what’s going on or will happen next, they’ll remain positive and engaged during the transition.

2. Establish New Goals, New Responsibilities and Communicate Proactively to Ease Fears

After downsizing, it’s normal for staff to feel fearful and uncertain about the company’s direction. During this uncertain time, communicate to your workforce about the changes they may experience in their jobs and set goals so they get something to focus on.

Remind your workers why their roles are significant to the organization’s overall objectives and goals. Ensure to lay out what has changed about their duties and everything crucial for success in the future. 

3. Have a Vision and a Plan

Downsizing means working with fewer employees than before, which can become difficult to function the same. You need to make sure there is a smooth transition for the workforce into their new roles to avoid business initiatives from falling behind.

If possible, look for ways to cross-train people to prevent certain functions and tasks from being disregarded after those responsible are laid off. That will help employees to avoid feeling overworked.

4. Focus on What’s Important

Once you’ve considered your workforce, you’ll want to keep your employees engaged and productive by focusing on positive actions. Set benchmarks for the workforce to ensure team members stay aligned while focusing on the most important stuff.

Continuously discuss with your workforce how difficult short-term workloads may help the company’s long-term outlook. For instance, tell them you understand they have a lot on their plate, but you get compliments from clients about their excellent services. 

5. Give Back and Make a few Sacrifices.

No matter how hard you try, a little animosity among the remaining workforce may be unavoidable at first. Often, you can suppress such emotions by making small sacrifices and giving back. Doing that will let your staff know that you care about their well-being even while times are hard. 

6. Show Empathy

It’s recommended that you remain genuine toward individuals who were let go and understand that the remaining employees have a heavier workload. Ask them about their take and let them vent their feelings about the downsizing.

Ask for employee’s thoughts about the downsizing rather than have them converse behind your back.  

Also Read – 14 Best Discord Bots to Maximize Productivity on your Discord Server


One of the biggest challenges companies face while grappling with the constantly shifting economic landscape is if their current workforce helps make the transition necessary to their success.

Most organizations tend to prioritize short-term financial goals over long-term employees’ well-being. However, workers are the lifeblood that allows a firm to keep delivering products and offering services, ultimately generating shareholder benefits. 








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