Corporate Shake-Ups and Layoffs: The Human Cost of Change

Introduction: The Changing Face of Corporate Stability

Companies are constantly transforming due to the changing nature of the economy, technology, consumer demand and increased competition. Restructuring, layoffs, new leadership and culture conflicts are just some examples of how organisations are changing and adapting to ensure they can succeed in a competitive environment. Whilst company shake-ups are often seen as necessary, they can have many effects on employees.

The main issue facing businesses today is to ensure they keep their people and values intact during periods of change. If organisations place profit above their employees, problems can arise which will have a negative impact.

Corporate Shake-Ups

Restructuring has become a key part of running a business. Mergers, acquisitions, new leadership, department merging and realigning the business can all be used to increase efficiency, decrease costs and give the organisation an edge in the market. Often businesses will look to do this in fast paced industries to help them adapt and focus on new areas in the business.

However, any major change to your company will affect your structure, decision making and relationships with colleagues. Poor communication can cause uncertainty within your organisation.

A clear vision and transparent leadership with a realistic plan will help your organisation. Giving your employees a clear reason behind any tough decisions will help protect your business. However, poor restructuring can cause confusion within the company and cause a lack of accountability. Experienced staff may feel demotivated to stay within the organisation.

Layoffs

Layoffs can be one of the biggest decision’s an organisation can make. Businesses often need to place employees on the redundancy list due to a decline in revenue, a change in business model, automation, over-expansion and to improve profitability. Whilst laying off staff can help reduce costs, there can be many issues to consider.

Employees can feel financially insecure, lose their sense of self and can negatively impact their wellbeing. For employees who are staying within the business they can feel stressed, guilty and worried about becoming redundant. Even employees who are not at risk of redundancy may feel disengaged if they feel they are in an unpredictable environment.

Layoffs can cause loss of knowledge, a lack of knowledge within the organisation and an increased workload. If you don’t know what skills are essential to the business it can cause problems.

A good redundancy plan should include a balance between saving money and showing your employees they are valued. Try to be transparent with the changes, ensure there is a fair process, offer meaningful redundancy packages and support with moving on in their careers. Redundancy should be seen as a major decision to make.

Culture Conflicts

When two organisations merge, acquire or expand internationally, they can face culture conflicts. The organisations may have similar goals but completely different values, communication styles, management styles and risk taking.

A company may have a top down structure with decisions being made centrally. This can cause conflict with a company who like to be independent, innovative and quick to work with others. Differences between traditional business processes and agile start-up processes can cause conflicts.

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If leadership don’t take culture differences seriously it can cause many problems. Employees will feel threatened by a lack of knowledge and management will struggle to gain authority.

A culture integration plan should be a key factor in your strategies. Identify the values both sides have in common, be honest about the differences, set expectations and ensure employees from both teams can work together. A positive company culture doesn’t need everyone to be the same, but should show respect, have consistent standards and a clear understanding of goals.

Leadership & Communication

During periods of disruption having credible leadership is key. Employees will be paying close attention to what leadership are saying and whether they are living by their values.

Poor communication will cause more confusion. Being honest will help employees understand what is changing, why decisions are being made and how the organisation will move forwards. Be honest about any concerns.

Managers can also be supported during times of restructuring. They often have to deliver difficult news and ensure the team are performing. They can become overwhelmed if there isn’t much guidance.

Having consistent, empathetic and accountable communication will help build trust. If you are honest, a good listener and offer support you are more likely to keep employees engaged.

Creating Resilient Businesses

Corporate shake-ups, layoffs and culture conflicts are unlikely to disappear within an increasingly competitive global economy. However, having a clear plan, communication and management of change can help.

Ensure you have a workforce plan in your decisions, culture fit checks when acquiring, invest in your leaders and implement a reliable feedback system. Regularly checking employee morale, retention, productivity and trust can help spot issues.

Ultimately to have sustainable success within your business you need to ensure your employees understand where you are going, have trust in your leadership and feel they are valued.

The best organisations aren’t the ones who don’t face any disruption but those who can adapt to disruption without losing sight of their people. In an ever changing world having the ability to strike a balance between business needs and taking responsibility for your people could be one of the most important ways to gain a competitive edge.