Assignment On: Downsizing & Restructuring

Course Name: Manpower Planning & Personnel Policy

Course Code: HRM 601

Submitted By
KAZI MOHIUDDIN ALIF
ID: 20G10016
5th batch
Dept. of Business Administration

Submitted To
Ashutosh Roy
Associate Professor
Dept. of Business Administration

Date of submission
September 26, 2020
Ans—1
When considering a downsizing, employers and HR leaders often miss an opportunity to
increase employee engagement and improve productivity by failing to recognize the
importance of supporting and engaging the employees not directly impacted by the downsizing
- the survivors.
To minimize the impact of a reduction in force, HR leaders and managers should be coached
about how to approach and communicate with survivors, as well as with impacted employees.
Here are five simple actions managers and HR leaders can take to minimize the impact of a
downsizing event on remaining employees:
• Create A Downsizing Plan: Delivering notifications to transitioning employees is one
of the most difficult tasks during a downsizing. No matter how experienced or effective
a manager is, most are unprepared to inform employees they’re being let go through no
fault of their own. Your outplacement provider should be able to help you create a
downsizing plan that includes messaging for impacted employees and clearly
communicates the impact of the changes on the survivors.
• Communicate, Communicate, Communicate: It goes without saying that
communication is critical following a downsizing. If you give in to the temptation to
run and hide or ignore the survivors, negative employee sentiment will impact your
employer brand and your ability to reassemble and move forward. During a downsizing,
make helping your managers to communicate with remaining employees a priority.
When managers are fully prepared to communicate company news with properly
prepared messaging and responses, the bad news will seem less personal and will be
easier for both exiting and remaining employees to accept.
• Let Go of Assumptions: Downsizings are an emotional time for the impacted
employees, managers giving the notifications, and the surviving employees. Be
prepared to offer support for remaining employees and managers, even as you are
supporting exiting employees
• Find Ways to Motivate Survivors: Managers who are transparent with employees
about their expectations often motivate employees to improve their productivity and
find meaning in the work they do, bringing back a sense of normalcy to the workplace.
Now is not the time to stop investing in your remaining employees. Staying focused on
their career development and short and long-term goals, especially following a
downsizing, can bring a renewed sense of focus and engagement to the survivors.
• Send a Positive Message To Maintain Trust: Survivors are always watching how
their employers treat exiting and remaining employees. When we treat all employees—
regardless of their position, tenure, or background—with respect and dignity, exiting
employees are more likely to remain brand advocates, and survivors are less likely to
lose faith in their employer. Strike the balance between supporting exiting employees
through a career transition program and keeping survivor morale high to avoid the
negative ripple effects of a downsizing.
Ans—2
Downsizing is the process of reducing costs by reducing headcount. Jobs may be eliminated
voluntarily, by offering employees a buyout, or involuntarily, through a layoff.
There are several reasons a company may downsize:
• Recession: Poor economic conditions may spur a business to downsize to stay afloat
or maintain profitability.
• Industry decline: If a business's specific industry is facing a crisis due to technological
or other difficulties, reducing costs may be a necessity.
• Merger: Downsizing may also occur during a merger between two companies, or in an
acquisition of one company by another. Or, if the merger or acquisition has not yet
happened, a company might downsize to appear like a more viable candidate.
• Streamlining: Downsizing can also occur when a company wants to “streamline” itself
through corporate restructuring in order to increase profit and maximize efficiency.
• Competition: If a rival company has reduced costs by reducing its workforce, a
company may feel pressure to do the same to stay competitive.
Regardless of the reason for downsizing, when a company reduces its workforce, it should do
so using nondiscriminatory criteria.
Downsizing has been very popular in recent years, and at first blush it's tough to argue with the
reasoning.
Many firms had added workers who were ot pulling their weight. By eliminating many of these
positions and trimming expenses, business firms (and public agencies as well) sought to get
more bang for their buck.
But recent research shows that, in most cases, these efficiency measures, at best, have had only
short-term benefits.
There are a number of reasons why downsizing has failed to live up to its billing.
• One is that many companies have not implemented the process correctly. They have
eliminated jobs, but not the work associated with these jobs. For example, when five
people in a department were let go, their work would fall to the rest of the people in the
group. And the remaining people had a difficult time coping with these new demands.
• Second, even if the firm let its least qualified people go and kept all of the most talented
personnel, the new work load was so great that some of the remaining people began
looking for jobs. And they were able to find them because they were highly skilled and
in demand.
• Third, the remaining employees often had morale problems which further reduced their
productivity.

While these are only a few of the reasons why downsizing has failed in many firms, they are
sufficient to point out two key steps that companies must take to downsize effectively.
Ans—3
Restructuring or Re-engineering is the managerial term for the act of reorganizing or re-
designing the financial, legal, ownership, operational, or other structures of a company for the
sake of building it more successful, productive, moneymaking organization, or better organized
for its current needs.
There are many reasons for which a company have to do restructuring, there are many benefits
of restructuring a company. Many company wants to do restructuring because they want -
• To reduce costs
• To concentrate on key products and accounts
• To incorporate new technology
• To make better use of talent
• To improve competitive advantage
• To spin off a subsidiary company
• To merge with another company
• To expand the business or operations by achieving faster growth.
• To carry on the business more economically or more efficiently.
• To focus on its core strength, development of core competencies.
• To reduce dependency on others.
• To obtain tax advantages.
• To implement innovation in technology.
• To improve the debt-equity ratio.
• To have a better market share.
• To overcome significant problems in a company.
• To facilitate horizontal and vertical integration.
• To become globally competitive.
• To eliminate (unnecessary) competition.
This is why restructuring is unavoidable and to survive in global economy must adopt
restructuring.