Published June 17, 2009

5 Tips for Downsizing and Layoffs

To help your bottom line, you've already tried everything from trying to reduce overhead to cutting back on employee hours and reducing energy costs. Nothing seems to be getting your small business on the road to recovery during these tough economic times and the only answer is company layoffs. This will be a difficult time for your business because nothing is easy when it comes to company downsizing. However, these five layoff tips will help you make the transition through this difficult time smoother and more effective.

  1. Plan and Act

    Don't resort to company downsizing in a frivolous attempt to save face. Company layoffs are a serious matter that should be approached with tact and diplomacy. You need to develop and implement a directed plan of action. Even if you are simply considering company layoffs as an alternative option for the future, it's important to tackle the issue far in advance.

  2. Try to Increase Profit

    Sometimes the real issue when it comes to company downsizing is not that there are too many people, but that there is too little profit. Focus a great deal of energy on increasing profit if company downsizing looks like it is on the horizon for your small business.

  3. Be Honest

    When it comes to company layoffs, honesty is the best policy. Don't hide information from your leaders and managers. If other employees come forward with questions and concerns, be sure to address them with complete sincerity. No layoff tips can help you avoid disappointing your workforce, but you need to be honest in order to build trust and maintain relationships through the eye of the storm.

  4. Prepare the Workforce

    Even if you don't know who will be laid of or when, it's important to start preparing your workforce for the worst. Company layoffs should come as no great surprise. All members of your organization should be informed well in advance if this may become a possibility for your company. Hold a meeting and disclose pertinent, concrete information to your employees. Let them know that you are doing all that you can to avoid making layoffs and that company downsizing is a last resort. You might also consider welcoming any suggestions or tips from the workforce on how to further reduce costs and avoid layoffs.

  5. Avoid Legal Troubles

    One factor you need to consider when designing company layoffs is that there are many legal issues. A corporate lawyer will generally provide layoff tips that say to design your layoffs around a last-hired, first-fired model. This ensures that employees cannot file suit regarding discriminatory acts against you. As a small business owner, you need to protect your remaining assets during company layoffs. Approach the situation on the basis of seniority and nothing more.

These layoff tips might not necessarily help you save jobs, but they will make the transition through a period of company downsizing more endurable. Company downsizing is becoming a harsh reality for thousands of people in a variety of industries, but you can make the best of the experience with these layoff tips.