Corporate Downsizing
- INTRODUCTION -
Downsizing, restructuring, rightsizing, even a term as obscure as census
readjustment has been used to describe the plague that has been affecting
corporate America for years and has left many of its hardest working employees
without work. In the 1980's, twenty-five percent of middle management was
eliminated in the United States (Greenberg/Baron 582). In the 1990's, one
million managers of American corporations with salaries over $40,000 also lost
their jobs (Greenberg/Baron 582). In total, Fortune 500 companies have
eliminated 4.4 million positions since 1979 (Greenberg/Baron 627). Although
this downsizing of companies can have many reasons behind it and cannot be
avoided at times, there are simple measures a company can take to make the
process easier on the laid-off employees and those who survive with the company.
- STAGES OF DOWNSIZING -
The downsizing process can generally be broken down into three distinct
stages. The first stage is called the diagnostic stage. In this stage,
management staff pulls together and determines the amount of costs and expenses
that need to be reduced, and how much can come out of layoffs (Moore 49). This
stage usually takes about two to three months to complete. During this time,
the upper management reviews all financial records in order to determine how
much is needed to be cut from salary expenditures (Moore 50). This stage is
concluded when the senior management has a detailed plan on who will be let go,
and who will remain with the company. During this stage, there is one common
mistake many companies ...