Downsizing with Dignity

Downsizing or doing layoffs is a toxic solution. Used sparingly and with planning downsizing can be an organizational lifesaver, but when layoffs are used repeatedly without a thoughtful strategy, downsizing can destroy an organization's effectiveness. How you treat people really matters - to the people who leave and the people who remain.

One outcome of downsizing must be to preserve the organization's intellectual capital.

How downsized employees are treated directly affects the morale and retention of valued, high-performing employees who are not downsized.

Downsizing should never be used as a communication to financial centers or investors of the new management's tough-minded, no-nonsense style of management -- the cost of downsizing far outweighs any benefits thus gained.

Lastly, if downsizing seems like the practical solution right now, remember that financial cycles can change. A year from now, your company may be in a position to hire new talent. The manner in which you dismiss your employees during a downsizing phase may have a positive or negative impact on your next recruiting efforts. Colleagues and friends talk and they will share whether their experience during your downsizing process was smooth and appreciative, or chaotic and neglectful.

Check out this article by Alan Downs for About.com

http://humanresources.about.com/od/layoffsdownsizing/a/downsizing.htm