LAYOFFS & DOWNSIZING

BALL, ELLEN, JOVY, KEVIN,

LAWRENCE, LOIS, RAYMOND,
SAMUEL, SING
BACKGROUND
 Financial Tsunami 2008
Unemployment
 Layoffs worldwide

 Unemployment rate:
› U.S : 9.8%(Sep 09)
› 6.2 %(Sep 08)
› U.K 7.9% (Jun-Aug 09)
› 5.8% (Jun-Aug 08)
›
 H.K: 5.3% (Jul-Sep 09)
› 4.1 % (Oct- Dec 08)
›
›
Affected sectors: banking & finance,
automobiles, technology, media…
 HSBC

 Sep 08- Apr 09: laying off staff…


 Worldwide: 6100 or more- closed US
consumer lending business…

 HK :650 or more- mostly from private
banking sector

Remaining employees
What do you need?
Maslow’s hierarchy of needs

Introduced in 1943 by Abraham

Maslow ("A Theory of
Human Motivation" )

Suggested that people are motivated to
fulfill basic needs before moving on
to other needs


• Physiological Needs : most basic
needs that are vital to survival
• Security Needs : needs for safety and
security
• Social Needs : needs for belonging,
love and affection
• Esteem Needs : the desire to be
accepted and valued by others
• Self-actualizing Needs : the full
realization of one's potential
Negative Effects
Negative effects of layoffs

To the remaining employees


Reduced working performance
Lowered organizational commitment
Lower morale
Lower job security
Increased workloads
Lower job advancement opportunity


Application of Maslow’s
Hierarchy of Needs Theory
Physiological needs
lower quality of life
reduced spending


Safety
less motivation to work
loss of job security
Search for new job



Application of Maslow’s
Hierarchy of Needs Theory
Social
lossof sense of belonging
poor relationship with the senior staffs


Esteem
less motivation to work

Self-actualization
poor prospect


Survivor Syndrome
Morale ↓

Commitment ↓

Motivation↓

Engagement ↓

Lack of trust and loyalty

Productivity of employee↓

 Those negative mental effect will finally

turn out a decrease in labour
productivity

Apart from the pressure caused by
anxiety, the huge workload will
also lead a super workload

Great increase in workload

 According to the findings of a

CareerBuilder survey
(www.careerbuilder.com) of more than
4,400 workers released at the end of
May
Responsibility taken ↑ 47%
Workload doubled 37%
Burned out 30%
SHORT TERM
Measures
 In short term
 Address Feeling

 Motivating

 Remove puzzle

 Managers’ attitude
 Be empathetic & positive
 Be honest about the realities
› Any uncertainty in future ?
 Be understanding of your employer
and employees


thoughtful
ness
 Address survivors’ feeling

 Give people time to grieve

› Let them talk and voice their concerns
›
 Values the remaining employees


 Note
the needs of the laid-off
employees


 Not convey anger and frustration

no puzzles

 Reassurance of security

 Restore trust

 Recognizing people are experience a
loss

 Motivating
Re-emphasize the vision and mission

Managers should be visible &
accessible

Provide frequent, truthful & direct
communication

Re-emphasize the necessity for
the downsizing
 motivation
motivation
 Insight

Clarify new roles and responsibilities


Empathetic leadership

Develop a fair system to re-distribute
work

A calm, focused approach to a new
way of working
 insight
 Allowthem to have time and space to
deal with the anger, loss and denial

 Let them have a break
LONG TERM
Measures
Motivation

 Reasonable rewards

 High involvement

 Sense of ownership



 Welfare

 Flexibility

 Support

 Developing

Communication
 Providing employees with clear
indications of what is expected of them so
that

 Confer with employees regularly to
discuss performance and strategies and
routinely ask employees what the can
be done to make the company a better
place to work so that
Restructuring the company

 Simplify the flow of information


 Simplify
the corporate structure
unnecessary jobs altogether.

 Provide them training in order to help
them to adopt the changes in the
working environment


 Communication
 Providing employees with clear indications of
what is expected of them.

 Confer with employees regularly to discuss
performance and strategies
 • Sense of ownership: Provide
employees with a sense of ownership
in their work and the work
environment
•
• Support: Emphasize that you are there
to help them and be a productive part
of the team.

CONCLUSION
Negative impact
 Insecurity

 More workload

 Less loyalty and motivation(Survivor
Syndrome)

 Worse working performance


Short-term solutions
 Demonstrate empathy

 Be positive

 Tell the truth

 Be understanding

Motivate

 Be insightful

Long term solution
 Communicate

 Establish long-term incentives

 Restructure the company
Reference List
 http://www.bls.gov/news.release/mmls.nr0.htm
 (U.S. Mass Layoffs Summary: U.S. Bureau of Labor
Statistics)
 http://www.statistics.gov.uk/pdfdir/lmsuk1009.pdf
 (Labour Market Statistics, Office for National
Statistics, UK)
 http://mediadecoder.blogs.nytimes.com/2009/10/19/time

 (NY Times layoffs)

 http://bits.blogs.nytimes.com/2009/03/26/google-plans-to-la
 (google layoffs)



 • http://www.hketousa.gov.hk/usa/press/2009/oct09/1019
(HK Economics & Trade Office: unemployment- 09)
http://www.hketousa.gov.hk/usa/press/2009/jan09/012009_2.h
(HK Economic & Trade Office: unemployment -08)
• http://www.businessweek.com/globalbiz/content/apr200
(HSBC layoffs, Business Week 09)
http://www.thestandard.com.hk/news_detail.asp?
pp_cat=30&art_id=81159&sid=23548600&con_type=1&d
_str=20090422&sear_year=2009
(HSBC layoffs, the Standard 09)

http://www.talentmgt.com/industry_news/2008/Novemb
Thank you!