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Downsizing 101

Most discussions about downsizing focus on the legal, economic, or psychological issues raised by this practice. These are essential concerns, but we rarely consider how or why downsizing is also an ethical issue. The next two columns are an attempt to redress that problem. Here, we’ll consider your ethical responsibilities if you are the one charged with giving the bad news. In the second column, we’ll look at what you ought and ought not to do if you are the one being downsized.

WHAT’S IN A NAME?

Downsizing refers to a company’s decision to reduce its workforce for reasons other than poor performance, criminal conduct, or unethical behavior on the part of those being let go. The word is a euphemism meant to soften the blow as much for the company as it is for the soon-to-be eliminated. There is nothing wrong with making a difficult task easier to bear. In fact, there are good ethical reasons for doing so, as we’ll soon see. Still, there is no getting around the fact that downsizing is a type of layoff, with all that this implies. The ethical manager will keep in mind what is really going when he or she is charged with letting good people go.

WHY DOWNSIZING IS AN ETHICAL ISSUE

Anytime we’re faced with a decision that can affect the rights or well-being of others, we’re looking at an ethical issue. No matter how strong the justifications for reducing the workforce are or seem to be, laying off loyal and productive employees is an upsetting experience for all concerned, and those on the receiving end face not just financial but psychological injury.

How so? For many of us, the workplace isn’t just a place for work; it’s where we develop and maintain some of the most important relationships we have. During the week, we spend more time with co-workers than with our families, and for better or worse, work is how many of us define ourselves and give meaning to our lives. Getting laid off compromises all of these things, so managers should think of downsizing as a deep and painful trauma for those being let go, and not as a mere setback or reversal of fortune.

Yes, downsizing has legal implications, and it is understandable that companies want to minimize their liability when they downsize. Yes, there are economic matters to consider, which makes downsizing a management issue, too. But at its core, downsizing is an ethical issue, and the good manager is concerned not just with protecting the company’s financial and legal interests but also with honoring the dignity and integrity of the human beings who work on the front lines and who are the lifeblood of the organization.

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