---HRM Assignment # 5---

We are task to Visit and identify a company website that has undergone HR downsizing and Identify the cause of downsizing and describe its processes. But before stating example of company which undergone downsizing let me first define and discuss its parameters and meaning.


Description

In the face of slowing or declining sales, companies often downsize their employee base as a means of cutting costs to boost profitability. In 2007, nearly 1 million employees lost their jobs in a mass layoff (50-plus employees) in the United States (an average of 180 workers in approximately 5,300 separate events, according to the Bureau of Labor Statistics). The number of layoff events in the United States in September 2008 was the highest since September 2001. Although downsizing is effective for significant cost reduction, it often produces unintended side effects, such as damaged employee morale, poor public relations, future rightsizing hiring costs and an inability to quickly capitalize on opportunities when the economy improves. Skillful downsizing should help a company emerge from challenging economic conditions in stronger shape. Creative efforts to avoid downsizing include hiring freezes, salary cuts or freezes, shortened work weeks, restricted overtime hours, unpaid vacations and temporary plant closures. When downsizing proves unavoidable, the ultimate goal should be to eliminate nonessential company resources while minimizing the negative impact on the remaining organization.

Methodology


Downsizing can be effective if implemented appropriately. Companies must be careful to avoid sending the wrong messages to employees, shareholders and the media. Successful downsizing requires managers to:

• Evaluate the overall impact of downsizing. The total cost of downsizing-including both financial and non-financial costs-must be taken into account. Managers must calculate the present value of all costs and benefits associated with the cuts, including severance packages, lower employee productivity due to disorder or talent loss, eventual rehiring expenses, future rightsizing costs and the lost opportunity costs associated with not having the appropriate manpower to accelerate out of the downturn. Investing in areas customers care about-while competitors are cutting back-helps position the company to take or sustain the lead once conditions improve. The value created from downsizing should exceed the cost of lower employee morale and potential damage to the company's reputation;
• Develop a smooth downsizing process. It is crucial that managers invest aggressively in upfront planning for the job cuts. A company typically forms a committee to determine the appropriate level of downsizing and creates a process that takes into account the best interests of the company and the shareholders. Other important activities are training managers to conduct layoffs and assisting former employees in their job searches.
Common Uses

Companies use downsizing to:
• Reduce costs;
• Rightsize resources relative to market demand;
• Signal that the company is taking proactive steps to adjust to changing business needs;
• Take advantage of cost synergies after a merger;
• Release the least-productive resources.



10 Ways To Survive Your Company's Reorganization, Takeover, Downsizing, or Other Major Change.

By Morton C. Orman, M.D. Copyright © 1995-2002 M.C. Orman, MD, FLP

Many companies today are under intense economic pressure. Reorganizations, takeovers, mergers, downsizings, joint ventures, and other major changes are extremely common, as companies try to grow and survive.
These changes present new challenges and demands for everyone, from the C.E.O to the telephone receptionist. All members of the organization must therefore learn to cope with change or suffer consequences.
When change is not handled well, additional loss of jobs can occur. In addition, demoralization of the work force; increased worker turnover; decreased cooperation and teamwork; and increased levels of stress, anxiety, absenteeism, illness, and mistakes can follow.
The purpose of this Special Report is to highlight eighteen principles that are useful for coping with organizational change. While all eighteen of these principles may not apply to your situation, please read through the entire list to find those that do appeal to you.

1. BE PREPARED FOR CHANGE

Change is--and always has been--an inevitable part of life. In today's business climate, however, the pace of change has definitely increased.
Since most people normally hate to go through change, you can easily understand how today's pace of change can be stressful for many employees.
Most of us prefer established routines. We like to feel secure, stable, and familiar with our responsibilities. The one thing we hate most is uncertainty--uncertainty about our jobs, our future, our status in the organization, the role we are expected to play, and what other changes might be coming down the pike.
Unfortunately, most businesses are forced to make changes today just to survive. Global transformations require speedy adjustments. Local and national economic forces must be recognized and responded to promptly. New sources of competition and new technologies suddenly appear out of nowhere.
Like successful professional athletic teams, most businesses today must continually make changes to remain competitive.
Thus, instead of fearing change, resisting it, or hoping it won't ever happen to you, it's much better to prepare yourself mentally for the inevitable changes that are likely to occur.
Start today by imagining how you could cope with sudden, massive change. Think about likely scenarios and then brainstorm, on your own or with others, about how you might best respond.
Assume that the "rug could get pulled from beneath you" at any time. Then, if this happens, you won't be caught off guard. You'll already be psychologically and emotionally ready.
If the changes never come, you'll still be better off. Having prepared yourself in advance will enable you to feel much more confident and secure in your normal day- to-day activities.

2. EXPRESS SADNESS, LOSS, ANXIETY ABOUT THE FUTURE

When change does occur, don't pretend it isn't painful. Yes, change can bring new opportunities for personal growth, accomplishment, and organizational success. But it also causes feelings of sadness, loss, and anxiety about the future. These are normal human responses.
When people get laid off or fired, everybody hurts. We feel for our friends and coworkers. We empathize with their pain, anger, and sadness. In fact, we may have our own similar feelings to deal with, as new demands and responsibilities suddenly come our way.
When people get promoted, when organizational relationships change, or when our own job responsibilities become altered, there is a normal reaction of sadness, anxiety, and loss.
One of the worst things you can do when this happens is to pretend everything is "just fine." Even if you agree intellectually that the changes are necessary, emotionally you still may have some painful, negative reactions to deal with.
Unfortunately, today's business culture has little regard for honest human emotions. Expressing or even acknowledging negative feelings is considered "inappropriate." Workers are expected to be upbeat, positive, and "team players" all the time. While this is a laudable goal, there should also be room for people to express heart-felt negativity as well.
Truly enlightened business leaders know this. During times of significant change, they actively solicit negative feelings from their workers. They know that denying these feelings or trying to suppress their expression will only make things worse.

3. WATCH OUT FOR UNREALISTIC EXPECTATIONS
Unrealistic expectations can be a tremendous source of stress and unnecessary suffering. Unfortunately, when organizations undergo downsizings, restructurings, or other major changes, a whole host of unhealthy, unreasonable expectations frequently arise.
Upper management may expect, for example, that increased productivity will quickly occur, even though the work force has been seriously reduced. Or, management may expect they can impose any changes they want, without consider-ing how employees feel about them.
Employees, on the other hand, might expect that management should always act in a caring and compassionate manner. They might expect better communication from company leaders; more sensitivity to their feelings and needs; or more respect for their health, well-being, and family responsibilities.
While all of these things may be important for good employer-employee relationships, to expect them to be forthcoming from management (without encouragement from the rank-and-file) is to invite disappointment, resentment, and low morale.


4. DON'T LET YOURSELF OR OTHERS BE ABUSED

During times of change, it is common to let yourself and others be easily abused. When workers have been fired or laid off, there is a natural tendency to wonder if you might be next. This climate of fear might prevent you from speaking up forcefully when excessive or unreasonable demands are placed upon you. Anxiety quickly spreads throughout the entire workforce, making it even more difficult to obtain support for questioning unreasonable company policies.
But sometimes, questioning policies is healthy and appropriate. If you feel that you or fellow workers are being unfairly abused, try to tactfully broach this subject with your immediate superiors. Try to do this in a way that isn't offensive or that doesn't make you appear to be lazy, uncooperative, or unwilling to do your share. Yes, there is always a risk when you make such a move. You could easily get fired or be branded as a troublemaker. But if you truly have your company's interests at heart, you may be able to negotiate a more fair and humane work environment for all concerned.
After all, if the remaining workforce is angry and demoralized, how could this possibly be good for business?


5. ACKNOWLEDGE ANY INCREASED PRESSURES, DEMANDS, OR WORKLOADS
One of the biggest mistakes most companies make when they downsize or restructure is they fail to acknowledge the increased pressures, demands, and workloads that temporarily fall upon remaining employees.
Sometimes, retained workers are asked to do the work of two or three individuals with little appreciation or acknowledgement. Their salaries are not increased commensurately or perhaps even at all. The resources made available to them are often very lean or nonexistent. While at the very same time, the demands on their productivity might be significantly increased!
All of this could occur without even a word of thanks or gratitude from the company leaders who ultimately benefit from such an arrangement.
Whether your company realizes how short-sighted this failure of recognition is, you don't have to compound this mistake. Be sure to regularly acknowledge to yourself and to your coworkers if your responsibilities have been substantially increased. While it may take time for you to successfully readjust, always strive to acknowledge whatever is true for you at the moment.
Discuss your feelings with your family, friends, and loved ones. Consider discussing them with your superiors, if you think this would be appropriate. Just don't make the mistake of suppressing your feelings, denying them, or pretending they aren't really there.

6. PROTECT YOUR LEISURE TIME

When companies undergo change, there is usually plenty of extra work to be done. Suddenly, people begin working through their lunch times. They can't find time to play golf, take a vacation, or even travel to their local fitness club. They begin to come home later and later in the evening, and they often find themselves back in the office on weekends and holidays.
This is a very dangerous pattern to fall into. It can easily grow into a generally accepted mentality. Remember, just because everybody else in your organization starts acting insane, you don't have to go along.
Fight against this common trend by protecting your leisure time, as best you can. Realize that during times of change and increased stress, it's actually more important to get away from your job and have some time each day for yourself. That way, you'll be refreshed, energetic, and much more productive than all those people who spend all their time on the job.


7. DON'T IGNORE YOUR FAMILY

In addition to maintaining time for yourself, it's also important not to forget your family. Spouses, children, and other family members can be excellent sources of emotional support when times are tough at work. But they won't be in a very loving or supportive mood, if all you do is neglect them in favor of your job.
Sure work often takes priority, but you family should be elevated to an equal priority as well. If you put too much emphasis on just one of these areas, and neglect the other, you're eventually going to find yourself in trouble.


8. DON'T TURN TO ALCOHOL, DRUGS, FOOD OR OTHER CHEMICAL COPING STRATEGIES
During times of increased stress, people often look for rapid and easy means of symptom relief. Headaches, muscle aches, nervousness, irritability, and sleep disturbances can all be very disturbing.
Please avoid the temptation to use alcohol, drugs, or other chemical coping methods to obtain relief from these common symptoms. Also watch out for tendencies to overeat, skip meals, or drastically alter your diet in response to increased pressures or an expanded work load.
While most of these coping strategies can make you feel better in the short run, they each have serious (sometimes even fatal) long-term consequences.
It's always better to use natural, non-chemical coping methods. Try to exercise more, communicate more, and set time aside each day to relax. Don't deprive your body of sleep or proper nutrition. You'll need both of these to cope with the many new demands that you might face.
If your symptoms don't respond to these natural measures, or if you feel yourself turning toward alcohol, drugs, or other harmful behaviors, DON'T GIVE IN. Pick up the phone and make an appointment with your doctor or other trusted health professional. Be totally honest about your problems and listen carefully to what they recommend. If you don't have a family doctor, get one. Whatever you do, don't succumb to taking the easy way out.


9. REMAIN UPBEAT AND POSITIVE

Even though you may be feeling stressed, angry, or scared about your future, you still need to remain upbeat and positive in most things you do. When organiza-tions change, the climate should remain positive, even though individual members of the organization may be having all sorts of negative or uncertain feelings.
I know this sounds contradictory, but it's not. Acknowledging any negative feelings you might be harboring actually improves your ability to remain upbeat and optimistic! When you're willing to look at all sides of your company's reorganization or change, your ability to notice the positives, as well as the negatives, improves. Then you can choose to focus on the positives, rather than dwell on the negatives.
Please be clear about this very important point. I am not saying you should "pretend" you are upbeat when you are really feeling down. What I am saying is that if you force yourself to tell the whole truth, you'll see both the positive and negative aspects of any major change. This expanded perspective alone will almost always help you feel more positive and upbeat, without having to deny your feelings to the contrary.
You can then use your powers as a creative human being to focus on just the positives (and help others in your organization to do the same) because you know from past experiences that this is a wise thing to do.
If a few key people in each organization or department take on this role as a positive emotional leader, it will quickly spread to other employees as well. If nobody steps forward to remind people of the truth, it's easy for company employees to remain stuck in a chronic state of negativity.

10. GET CREATIVE
One of the best ways to cope with organizational change is to "rev up" your natural powers for creative intervention.
Most problems are amenable to creative, innovative solutions. The only thing that usually keeps these solutions from arising is our own internal barriers and self- imposed restrictions.
Creative problem solving always involves risks. Proposing a new idea invites criticism from others. What if the idea fails? What if business losses occur? What if things end up worse than before?
You've got to be willing to accept such risks if you're going to be free to think creatively. Trust yourself and others around you to recognize any really horrible idea before it gets implemented. Then give yourself permission to swing out and think creatively--allowing any and all ideas to come to mind. Many companies have regular "brainstorming" sessions for just this purpose. During times of reorganization and change, these creative sessions are very important. Time should be set aside to make them a common occurrence.

This is an example of Company which undergone downsizing:

AtheroGenics (AGIX) Cuts Headcount by 40%; to Record One-Time Charge of $400K in Q3:

September 23, 2008 4:47 PM EDT

In a Form 8-K, AtheroGenics, Inc. (Nasdaq: AGIX) announced that on September 19, the company reduced its employee headcount by approximately 40% to a current staff of 30 employees. In addition, the Company has also eliminated approximately 20 open positions as a result of the downsizing. The Company is providing severance to employees affected by the workforce reduction, resulting in a one-time charge of approximately $400,000 related to the severance benefits, which will be paid in Q308.


Source:
http://www.bain.com/management_tools/tools_downsizing.asp?groupcode=2
http://financepub.blogspot.com/2008/10/list-of-companies-that-are-downsizing.html
http://www.streetinsider.com/Corporate+News/AtheroGenics+



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