The Effects of Downsizing on Employees Who Survive the Layoffs

Two young women, a blond and a brunette, are packing up their office coffee cup and papers into a brown box because they were laid off.


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Are you interested in learning how to deal with the effects of change on your remaining employees during layoffs? Downsizing and layoffs introduce many different changes in an organization including a change in how comfortable and secure each individual feels about their job within the organization.

But, other changes enhance the feelings of unease and discomfort that are inherent in any change. Cared about coworkers are no longer at work. Ways of accomplishing work change to make up for the missing employees. Your organization's culture will suffer from the layoffs, too.

No employee totally relaxes; they are waiting for the next round of cost-cutting layoffs—and they're afraid that the next round will include them. During a time of change and uncertainty, you can anticipate predictable issues, problems, and opportunities. In the midst of all of the change, employees may not realize that they are experiencing severe stress.

How Employees Experience Change Following Layoffs

During any change, members of an organization have:

  • Different ways of regarding change: Some people have difficulty accepting and adjusting to change; others will relish the changes and view them as great opportunities. Some people initiate change; others prefer the status quo. You'll find the majority of employees somewhere in the middle of these two poles.
  • Different amounts of experience and practice in change management: What is devastating to one employee may excite another or only mildly irritate a third person. Theoretically, people become better at managing change with more experience and practice. In this era of constant change, this is true. People develop immunity with their frequent experience of change. Despite this, don't downplay the potential reaction to an experience of change, for various individuals in a layoff situation.
  • Different ways of reacting to change: Some employees need to talk it out. Others suffer silently. Some find relief in complaining. Some talk and talk and talk, but are really supportive of the change. Others find ways to sabotage the changes and undermine organizational efforts to move forward.
  • During and following layoffs, your current employees have different amounts of contact with your former employees, and this can affect their reaction: This element of layoffs is explored further in how to cope when coworkers lose their jobs with change after layoffs.
  • Different amounts of change occurring in other areas of their non-work lives: While massive change provides experience, an individual who is experiencing vast amounts of change in other aspects of his or her life is challenged. He or she has less time, energy, and commitment available to deal with the ongoing work changes.
  • Different amounts of impact from the current changes and stress-producing situations: A person who finds her job completely changed will experience more distress than an individual who is asked to write an extra feature article each week.
  • Different amounts and types of support from their spouse, significant other, children, friends, supervisor, and coworkers: Each human being has a support system; when change is in process, you test the effectiveness of that system. Any forewarning people receive from downsizing should include information on how to build a support system at work and home.

All of these and other issues have an impact on the ability of each employee to manage workplace change, to continue to function productively at work. It is important to recognize that employees may not be capable of performing exactly as they have in the past during and following layoffs.

How People Experience Change

People experience personal distress during changes such as downsizing. This distress can include illness, defensiveness, low energy, lack of motivation, difficulty concentrating, accidents, and interpersonal conflict. Often individuals blame themselves for being weak or for their inability to handle it.

Sometimes organizations label people as resistors when, in reality, people move through the stages of change at different rates. How an organization introduces change has a profound impact as well. “People don’t mind change; they mind being changed,” is a statement that organizations need to take to heart. During layoffs, employees experience is changed. Thus, ownership of the changes is more difficult to create.

People form deep attachments to their coworkers, their work groups, their companies, their organizational structures and systems, their personal responsibilities, and their ways of accomplishing work. (If you find this difficult to believe, try changing an individual’s work hours by even fifteen minutes, or establish a dress code for a work environment that encourages casual dress.)

When anything that is important or close to employees is disturbed, whether by personal choice or through a larger organizational process over which they have no control, a transition period occurs. During this transition, people can expect to experience a period of letting go of the old ways as they begin moving toward and integrating the new.

The Bottom Line

As the Human Resources professional, manager, supervisor, leader, change agent or sponsor, you need to understand these issues around change and resistance to change. You must support the people in your organization through the downsizing experience. You need to understand the normal progression of change; during layoffs and downsizing, you cannot expect an immediate return to total productivity. Give your remaining employees a break.