Downsizing -- The Long Term Effects

Few government departments or branches have escaped the necessity of downsizing. The last three or four years have brought almost constant cuts in staffing, and some departments have been "hit" several times. For many downsizing has become an annual process.

When managers are faced with downsizing, they tend to focus on the immediate and practical needs that emerge at the time when staff are being let go. After all, employees need to be selected and notified, one of the most difficult tasks for any manager. Jobs responsibilities need to be shuffled, and generally the period where downsizing is occurring is very busy and emotionally taxing.

Unfortunately, there is a tendency for managers to focus on those that are leaving rather than those that remain. This also holds true for central training and consulting agencies who are asked to support the laid off employees with career development help, counselling, and other supports. There is no question that laid off employees deserve and need these kinds of supports and services. Unfortunately, there is a tendency to forget that after the laid-off workers are gone, the "survivors" must soldier on, and the manager must deal with the long-term effects on the remaining organization.

We are now seeing the effects of downsizing on those that remain. One of the most telling comments is often put forth by employees a year or two after downsizing, and it goes like this: "Sometimes I think that the ones who were laid off are the lucky ones". They usually go on to describe a workplace where employees feel:

. a lack of executive commitment to their functions
. confusion about the priorities of their organization
. increased workloads
. confusion about their mandate
. a sense of being betrayed by executives and managers
. a profound sense of distrust
. a sense of futility with respect to long-term planning
. undervalued and unappreciated

In operational terms, this translates into a number of problems.

. the organization moves towards less risk-taking and innovation
. destructive conflict tends to increase
. internal competition for resources increases
. individual staff members devote less effort to working together and more attention to doing things that will protect themselves.
. general listlessness and lethargy
. decreases service levels and increased public hostility

It is easy to understand these effects when they occur close to the time when down-sizing occurs, and remaining staff "grieve" the loss of friends and colleagues. But, these effects are now being seen as long as one or two years AFTER the downsizing period. There are indeed long term effects of downsizing that need to be addressed.
Understanding The Organizational Downcycle