Several organizations in many economies have conducted downsizing, transitions, and restructuring. For instance, employee reduction became a dominant phenomenon in the firm behavior throughout the 1990s majorly in Australia. As worker-layoffs have become abundant in the current years, the learning of this occurrence has attracted great attention. This paper provides an integrative procedure that harmonizes organization and environmental antecedents in aligning with the effects of layoffs on individuals and agencies. I will identify the patterns and discuss an analytical process concerned with the procedure used in downsizing at Intel Corporation. Recommendations for future research that will provide a better understanding of the worker's’ layoffs will also be discussed.
Corporate layoffs that are characterized by massive downsizing have been an unfortunate reality in the United States for the past years. Some economists question the short-term and the long-term benefits of worker reduction. Without conducting ethical downsizing, the layoff strategy always fails to save struggling companies because the enterprise becomes exposed to lawsuits and the employees become less motivated. According to Collins, organizations downsize to become competitive and cut costs (49). Ethical employee-layoff strategy focus not only on avoiding lawsuits and discrimination but also treating both departing and employed workers in a way that is acceptable to them. Managing laborers equitably and respectfully play a significant role in downsizing. Organizations focus on making profits regardless of the employees’ motivation. HSBC Holdings, General Motors, Borders, General Electric, and Intel corporations conduct massive staff-trimming to remove underperforming employees. Conducting layoffs without well-defined visions may lead to the same forces that resulted in downsizing in the first state or even worsen the situation.
Downsizing at Intel Corp. works for the company because it has become more innovative and produces the best processing chips, which is regarded as the best invention of the year. Moreover, the company has realized high profits after laying off 10,500 employees. However, making 10,000 employees quit becomes a dilemma during downsizing. Despite not making all the departing employees happy, Intel could employ strategies to ensure a larger percentage remains satisfied. Trimming staff improves an organization’s economic performance and offsets financial cost required to run it (Sakata, 195). Downsizing has both positive and negative consequences. Departing employees may not have alternative employment. Besides, some workers may find new jobs with better pay, terms, and conditions. According to Cummings and Worley, employees who lose jobs due to layoffs suffer physiological effects (43). An individual may lose confidence in his or her abilities and skills. The laid-off workers may also experience financial difficulties. People plan and construct their lifestyles based on the amount of income they receive regularly. They take and pay mortgages and debts based on their monthly salaries. When one loses a job and does not get any alternative, the unemployment benefits, and severance pay may not cover all their expenses.
Downsizing results in a shift in specialization and overburdening of employees which lead to workers not liking their new jobs and complaining regardless of retaining them. Staff trimming followed by the restructuring the business assets help in improving economic and workers output within an organization. The remaining employees lose motivation due to lack of trust in job security, human resource that does not consider human factors, altered work culture and transformed team composition (Iverson & Christopher 31). During employment, human resource personnel informs employees that their retention is the department’s key priority, but when massive layoffs occur, the remaining employees lose trust in such assurances(Hancock 590). After downsizing, their exist shift in specialization or increased workload has adverse effects on staff morale. Shifting employees to new fields cause an increase in stress when handling duties.
How I Would Have Handled Layoffs at Intel
Eliminating 10,500 jobs within five-month is a massive cut back. I would have considered the alternatives of downsizing. For instance, I could have reduced the number of hours employees work and cut their salaries across the board. Through implementing alternatives, employees become motivated with the human resources commitment because it shows the efforts of the organization of trying to keep them at work. Moreover, cutting salaries across the board and maintaining all employees portrays equality in the organization's management according to Fayol’s principles of management. The use of fortnight program implemented by Hewlett-Packard ensured that all employees earned nothing for a day in every two weeks until the organization received increased revenue. Before I conduct layoffs, I will determine if the problem is of little profit or having too many employees. For instance, the reason Intel was downsizing was to increase competition and profit.
Downsizing results in the lay-off of valuable talents which make situations worse and reduce staff morale. However, according to Intel’s decision, the organization employed many underperforming employees. I will use the process of well-thought out strategies for a change. First, to determine if Intel possesses many employees, I will evaluate Intel’s business plan to determine if the services that will be profitable have any effect in dragging down the company’s profits. Secondly, there has to be a well-defined objective for layoffs and a clear vision which ensures that the organization does not exhibit the same problems that occurred before downsizing. Unless there exist well-defined and shared views of the upcoming organization before layoffs, the past activities will sabotage the future. For instance, the Scott paper conducted layoffs of a total of 10,500 workers in 1990s and the following year, the company became unable to introduce a new product in the market and realized a reduction in profit. Later, the company was sold to its competitor, Kimberly-Clark.
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Before conducting staff cut backs, I will inform the members of the organization before the actual downsizing date. According to Hancock, ensuring the procedure of doing layoffs aligns by law to prevent lawsuits (601). Many countries have entitlements that get tied to age discrimination, disabilities, and civil rights. Downsizing should involve the removal of redundant job positions. Using the right strategy that avoids discrimination helps in ensuring equity and motivation among employees. For instance, the Southern National Corporation and BB&T financial company used hiring freeze to eliminate redundant positions. During the implementation of layoffs, I will treat all the employees with respect, research all the applicable laws and follow the legislation, and finally, give all workers the mental space to discuss the process.
The first process after making the decision to continue with downsizing is choosing the right employees. According to Sakata and Yoko, using measurable criteria to determine the means of selecting employees plays a major role in ensuring equity (193). For instance, I will use productivity and length of service. Using measurable criteria increases the morale of the remaining employees and reduce lawsuits. I will conduct downsizing face to face. Informing employees about job elimination face to face allows the remaining employees to ask questions and seek further clarification. Using social media or the internet to inform employees on job elimination affects the other workers psychologically. Being compassionate when conducting layoffs ensures employees morale. The criteria used for downsizing may not be 100 percent perfect. Some employees may have done their jobs well but become victims of number counting. Congratulating the outgoing employees for their contributions to the company and informing them that when any position arise, they will be notified first, motivates both the inside and outside employees. Laying out the facts and informing the affected employees prevents confusion and overwhelming through prior warning letters. After downsizing, distributing work equally ensures motivation. Overburdening employees reduce working morale that may have an impact on the company.
Recommendations on the Procedure When Conducting Layoffs
Using set employees number to downsize is not a good downsizing strategy. Accommodating workers interests and passions and ensuring fewer cuts help in retaining valuable talents within the organization which results in the long-term high performance of the Intel Corp. The personal consequences of downsizing include reduced staff morale and increase stress during work. Due to shift in duties after staff cut back, employees become uncertain due to thoughts of losing jobs and being denied the time to comprehend the psychological threat. Downsizing employees negatively affect their loyalty to the organization due to the fear of layoffs in the future. Workers empowerment and trust reduce considerably during layoffs.
Developing an adaptive human resource structure enhances corporate flexibility. According to Iverson and Christopher, an adaptive human resource system helps to focus the employees on coping with changes which occur as a result of downsizing (43). Adaptive staffing strategies ensure stable services when the organization becomes faced with fluctuations in expected demand. After downsizing, the burden of working on the jobs left by departing employees remain to be distributed among remaining employees. Identifying and setting levels of demand help in ensuring that workers meet the lowest level of demand.
The evaluation of alternatives to massive layoffs contributes to the improvement of employees motivation. The need to developed downsizing and tie it to an acceptable strategy assist in ensuring a larger percentage of the departing employees remain satisfied. According to Collins for instance, employees that become critical for long-term survival of the business or near retirement may require early retirement or voluntarily quit the job thereby reducing contributing to the downsizing of the company (28). Making early retirement available helps the organization in choosing individuals to become victims of downsizing. Moreover, reducing the number of hours and cutting salaries across the board lower the number of staff who get affected by downsizing.
Effect of Downsizing on Employees Passion
Recommendations on Reducing Cost and Maintaining Passionate Working Environment
Making downsizing a continuous corporate renewal process in which the business assumes the long-term perspective of increasing productivity, cutting costs, and increasing profits is a process which should be approached with care. According to Iverson and Christopher, the lack of a planned approach in downsizing reduce employees’ morale (22). Therefore, reducing cost and restructuring the workplace help to increase employees’ passions during work. Training employees on career management and job security concepts equip workers with the knowledge to manage themselves during downsizing. Using long-term and short-term employment reduces the difficulty of downsizing and maintaining employees’ passion. According to Hancock, helping employees in dealing with the trauma which results from layoffs assist in ensuring they stay focused on the job rather than thinking about future downsizing (574). Workplace activities play a significant role in employees’ passion. The laborers get motivated through ensuring job security, awarding highly performing workers, provision of opportunities for merit-based promotions, ensuring well-specialized team composition. Consistently communication the company’s progress to the employees after downsizing, and asking employees on areas that require improvement help in motivating employees. Offering outplacement support to departing staff assists them in finding new jobs that motivate both inside and outside employees.
To conclude, downsizing had detrimental and advantages to the organization. The use of a well-planned layoffs strategy ensures that downsized employees’ morale does not become adversely affected due to the loss of trust and threat of future layoffs. Moreover, restructuring the organization and distributing work equally among employees reduce the effects of overburdening which may result in the loss of passion among employees. Considering the alternatives of downsizing help to decrease the number of people who become affected by the layoff and shows employees how much the organizations need the results in motivation. Layoffs pose both advantages and disadvantages. Maintaining a passionate working environment and setting visions before downsizing help to ensure that businesses maintain focus and do not suffer from similar reasons that led to downsizing. Developing adaptive human resources structures and guaranteeing work offers both short and long-term employment help in preparing employees for downsizing. Ensuring equity and ensuring layoffs aligns by the law help to reduce lawsuits that may affect the company.