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Communication lessons from downsizing programs

01 Jun, 2020 Change communication, Internal communication

This article was originally published in 2015 and has been completely updated in 2020.

The findings of a study into organizational downsizing indicate the types of communication that employees prefer during troubled times. The research was valuable because few studies have investigated the perspective of those affected while they are in the midst of turmoil.

Downsizing is the planned, intended reduction in personnel in an organization. Retrenchments take place, the organization shrinks and is restructured. The purpose is to change processes and decrease size to improve efficiency and therefore reduce costs.

The study reported on the reactions of people who had survived retrenchments in a downsizing organization, in this case a large US multinational employing 50,000 people. The downsizing operation eliminated the jobs of more than 5,000 employees.

Rumors were rife. When employees went on breaks, it was not unusual to find over 30 people in the staff area talking about the downsizing. “We wasted more than 100 years of salary in all the time that was spent talking about what was going to happen. No one could do any work.”

Survivors expressed the need for communication that would help them work through the many ambiguities that suddenly confronted them in doing their work.

Focus groups with a sample of surviving employees indicated that:

  • Effective communication during downsizing provides a relatively complete description of the changes and their potential effects on survivors, especially the effect on job security. Completeness was more likely to be achieved in face-to-face interaction. For communication to be complete, the content had to be specific in order to clarify meaning. For example, complete descriptions of changes such as organizational revenue, sales plans and local changes of staff. Openness was important as well. Managers had to be accessible, willing to engage in dialogue and willing to disclose potentially sensitive information.
  • Communication has to be credible. Survivors tended to believe communication when it came from sources considered legitimate and honest (eg their immediate supervisor) and when the information conveyed was consistent with other events they saw happening around them. A significant influence of credibility was the perceived honesty of the information source. Consistency was another attribute that was important to them.
  • Supportive communication is considered to be helpful. This typically involves face-to-face interaction with other people, particularly with immediate supervisors, informal and personal, and were perceived to understand their individual needs and concerns.
  • The opportunity for participation is important – interactive or two-way communication in order to give people an involvement beyond simple understanding by their supervisors. Some also wanted the opportunity to be actively involved in shaping the changes.
  • Effective communication is coherent, or logical and consistent with the organization’s stated values and traditions. Management actions need to be consistent with what they say.

These lessons would help organizations to communicate better under pressure.

Training helps in delivering bad news to employees

Giving bad news at work is a stressful experience, and managers are often under-prepared for this challenging task. One way to address the problem is to conduct organizational bad news training for managers. German research in 2016 found that delivery of bad news at work can be enhanced with the help of training to reduce distress for both the messenger and the recipient. Such training also significantly reduces negative responses of the layoff ‘victims’ after the layoff. Nevertheless, giving bad news will always be a challenging task, despite preparation for doing so. Overall, it is worthwhile to provide managers with organizational bad news training in order to promote professional and fair bad news conversations at work.

About Kim Harrison – author, editor and content curator

Kim Harrison, Founder and Principal of Cutting Edge PR, loves sharing actionable ideas and information about professional communication and business management. He has wide experience as a corporate affairs manager, consultant, author, lecturer, and CEO of a non-profit organization. Kim is a Fellow and former national board member of the Public Relations Institute of Australia, and he ran his State’s professional development program for 7 years, helping many practitioners to strengthen their communication skills. People from 115 countries benefit from the practical knowledge shared in his monthly newsletter and in his books available from cuttingedgepr.com.

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