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September 15th, 2008
11:18 AM ET

Downsizing 101 – When You Have to Do It

Editor's Note: The Ethics Guy, Dr. Bruce Weinstein, writes the ethics column for BusinessWeek.com.

Bruce Weinstein, Ph.D.
AC360° Contributor
The Ethics Guy,
BusinessWeek.com

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. This is the first of a two-part series that will redress that problem. Today, we'll consider your ethical responsibilities if you are the one charged with giving the bad news. In the second part, 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 much 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 set-back 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 with honoring the dignity and integrity of the human beings who work on the front lines and who are the lifeblood of the organization.

DOING IT THE RIGHT WAY

I propose the following management guidelines for downsizing ethically:

  1. DO IT IN PERSON. This seems obvious thing to do, but I'm surprised by the number of reports I've heard about employees who were downsized on the phone or by e-mail. Managers who use this method claim it makes the whole thing it easier to deal with. Yes...but for whom? Certainly not for the employee being let go. As uncomfortable as it is to end someone’s employment, the right thing to do is to have a private conversation with him or her in person. The ethical principle of respect for others requires nothing less. 
  2. DO IT PRIVATELY. Respecting others means honoring their wishes and values, and it is reasonable to assume that most people would prefer to have troubling news delivered in private. This means in your office, with the door closed. I've heard of managers who broke the bad news at the employee's cubicle within earshot of everyone in the vicinity. Again, one would think that this would be a matter of common sense and common decency, but apparently neither is all that common.
  3. GIVE THE PERSON YOUR FULL ATTENTION. Interrupting the conversation to take phone calls, check your BlackBerry, or engage in other distractions isn't just rude. It tells the other person that the matter at hand isn't all that important to you and is yet another violation of the principle of respect. The impulse to turn your attention to less troubling matters is understandable, but along with the privileges of being a manager come responsibilities, and downsizing with integrity is one of the most important obligations you have.
  4. BE HONEST, BUT NOT BRUTALLY SO. Must you always tell the truth, the whole truth, and nothing but the truth? Yes, if you're giving sworn testimony in a court of law, but beyond the courtroom the duty to tell the truth is constrained by the duty to minimize harm. In practical terms, this means being forthright with the employee but also choosing with the care the words, tone of voice, and demeanor you use. Compassion– –literally, 'suffering with' someone–honors the dignity of your employee and speaks to the better part of your nature. We can't always make things better, but we shouldn’t make things worse.
  5. DON’T RUSH.  A shock takes time to absorb. Imagine that your physician tells you that you have a serious illness. Wouldn't you expect him or her to allow the news sink in, rather than to summarily dismiss you and call for the next patient? Being let go isn't as serious as getting a diagnosis of cancer or heart disease, but it is still a major, life-changing event. You owe your employee the space to absorb the information, and you may have to explain more than once what is happening and why. You would demand nothing less if it were happening to you, and you would be right to do so.

YOU VS. THE COMPANY

These guidelines assume that the organization has good reasons for downsizing–but what if you don't see things this way? For example, suppose your company believes that it is necessary to shift its customer service jobs overseas, and you believe that doing so is both unethical and bad for business. In this case, you not only have a right to object; you have an ethical obligation to object.

Does this mean that you should be prepared to give up your job on moral grounds? Not necessarily. Depending on your personal circumstances, your duties to your family or to yourself might justifiably override the value of making a statement by quitting. Even if you are committed to keeping as many jobs in the U.S. as possible, this goal will take time to achieve, and it may be easier to do so from within the company than from the outside.

The bottom line is important, but so are the values of respect, compassion, and simple human decency. The good manager takes all of these into account—always.


Filed under: Bruce Weinstein • Ethics
soundoff (7 Responses)
  1. Juliet

    So I read in the times online i feel that it is important that bush is creating this whole Russia and U.S just so Mcain can be elected by the manipulation of politics combined with accusations and think Bush is President and a-lot of bad things have happened, a-lot of deaths in Irag 9-11 and this so called war with Russia which i don't think will happen, it's politics and i hope that Bush and Mcain can move on with this same politics THAT WILL BE OF THE PAST and new results of Obama can change the face of America because to the majority of the world and the news of many other countries we honestly don't look so good.

    September 15, 2008 at 6:58 pm |
  2. pati mc., camp hill, pa

    Thank you Bruce.

    Your article is timely to me in a very real way. A few weeks ago, this very thing happened to me. The entire office was called in and told that as of Sept. 30th, we would no longer have jobs. The management responded almost exactly as your examples state (for the good). They related the facts, told us what would occur, allowed us time to absorb and then asked for questions. Stunned silence was the only response.

    I look forward to your next installment. Your advice is well taken and dead on. Once again, thank you, your timing is impeccable, unfortunately for me.

    September 15, 2008 at 6:51 pm |
  3. Debbie, Denham Springs, LA

    I agree with GF in Los Angeles. I work 11-12 hour days and no one cares or recognizes it. My retirement contribution that has been made for me by my employers is about to be cut in half-after I have worked for them for 19 years. I don't make enough to make up the difference. You're better off changing jobs every 5 years. I watch people get hired making almost as much as I do-with much less experience. I'm told its the dynamics of salary ranges these days. It's called "you screw yourself over by staying loyal to a company that isn't loyal to you." I have had to sit through layoffs and downsizing. Now I may have to again. The solution to out of hand expenses always seems to be downsizing. Why is that? I've decided to start putting my own best interests first and if that means I back off from the loyalty I've had toward my employer in the past...so be it.

    September 15, 2008 at 5:27 pm |
  4. MW

    It is a FACT that McCain is trying to pull strings to give a major military contract to Airbus in Europe instead of Boeing in America. This takes jobs AWAY from Americans.

    September 15, 2008 at 2:56 pm |
  5. GF, Los Angeles

    After my last job I've learned not to make my job define me as a person and I'm realistic to know that I'm just a cog in a money making machine – no one will remember if I had stayed everyday working an extra two hours or that I came in on a weekend. We're all expendable – unlike the past when employees really meant something. It's our duty to save and prepare ourselves for a potential layoff and also live below our means in case we do have to take a lower paying job.

    September 15, 2008 at 1:13 pm |
  6. Cindy

    I worked for this huge company, won't mention the name, but they so called downsized. But the truth is all that they did was got rid of people who had been there 15, 20 or so years so that they wouldn't have to pay them their retirement and their big salaries. Then they turned around and hired more people to do the exact same jobs but for less money. I left the company a year later and soon after that they moved the whole company overseas and everyone lost their jobs. And this company is huge and makes mega bucks but still chose to do their people that way. I think 99% of most of these big corporations do this.

    Cindy...Ga.

    September 15, 2008 at 11:58 am |
  7. Michelle Fonthill Ont,Canada

    When the subject of downsizing has really hit home for me in the wake oif Tthe John Deere plant in Ontario closing .This will cost 800 people jobs. This will not only hurt our cities ecomnomy but the ripple effect of the rising cost s of food gas and how will those 800peole find allternative employment it wil be a hard road to walk on after this . My prayers go out to all thier families andwho will effected by this.
    Michelle D.

    September 15, 2008 at 11:44 am |