• Since downsizing affects morale and productivity in remaining workers, a company should meet with employees to address concerns and explain the company’s vision going forward.

Studies have shown that following downsizing, surviving employees exhibit predictable behaviors. These can include showing a distrust of management, as well as a drop in productivity and morale. Surviving employees may see the displaced employees as victims, especially if management has been seen to treat those employees poorly or without tact.

On the other hand, where management has been seen to care for laid off workers, remaining employees may become even more committed and more loyal to the company.

Therefore, companies should strive to manage the release of employees and reduce the amount of discontent through good planning, good communication, and by assisting departed employees to become re-employed. This approach will result in the least amount of hostility in the downsized workers, help promote loyalty in the remaining employees, and minimize lawsuits.

Once the downsizing is complete, human resources and management should meet with remaining employees to discuss the future prospects of the company, assure people that jobs are secure, explain how the company will maintain profitability, and answer employee questions and concerns.