Business Downsizing — The Pros and the Cons


There are a lot of reasons that a business might choose to downsize. It could be due to problems in the economy or other struggles, or it could be because the company wants to move in another direction or is finding too much redundancy in its current employee positions. There may be other reasons, as well, that are individual to that company. But no matter why a company is thinking about downsizing, there are pros and cons to making that decision. Here are some of the biggest and most important ones to consider.

The Pros of Downsizing

For some companies, downsizing is absolutely the right move. It can make the company smaller, leaner, and more efficient, and can also make it easier for that company to stay competitive. Those are all great pros for any company that's considering whether to downsize or not. Another advantage to downsizing is that employees can better understand their job duties, and have more purpose with the work they do for the company.

Employees may also be asked to take on more responsibility, but in most cases that's not a bad thing for any employee who wants to grow with the company and potentially move up in the future. When a company gives their employees higher levels of responsibility, those employees start to feel like they can be trusted to do more. They want to do more, and they want to work hard for a cohesive company that's trying hard to go places. Downsizing has the opportunity to bring companies together.

The Cons of Downsizing

Like any business decision, though, downsizing has its cons. In some cases, it makes the company too small and stops it from being competitive. That's a risk some companies take, especially if they downsize too far. But another concern for companies that downsize is how the employees who remain feel about the move. Some of them will undoubtedly be glad for it, but others might struggle, especially if some of the downsized coworkers were their friends. They hate to see their friends lose their jobs.

If employees are angry at a company because others were downsized, they may be far less likely to work hard for that company in the future. Some of them may also leave, and that could mean the company becomes short-staffed or that a lot of good employees end up working for the competition. Those are all issues to consider, for any company who's thinking that downsizing might be right for their needs. When done carefully, downsizing can work well. But there are always risks and cons of any business choice.

Reasons to Downsize

Among the biggest issues with downsizing, is the reasoning behind it. In other words, some reasons to downsize make a lot more sense than others, and if there's a good reason the employees can understand, it's less likely to cause a lot of issues for the company, overall. One of the most common reasons to downsize is just simply that the company is too large or has grown too fast to work efficiently. It may have too many employees for the positions it offers, and not be able to provide what's needed to them.

Companies may also decide to downsize because they're losing money, or because competitors are downsizing their companies, as well. These businesses have to carefully evaluate their bottom lines, in order to make sure they're making a wise decision for themselves and their employees. Customers should also be taken into account. It's not always easy to make a downsizing decision, but for some companies it becomes a necessity if they're going to continue to stay afloat in their industry and business climate.

Another reason that a company might downsize could be so it could work its way into a different area or industry, or so it could consider expansion of another part of itself. If a company wants to pull back and downsize, so it can grow in a different direction in the future, that's a good reason for it to consider how downsizing could fit into its plans. With all the great reasons for a company to downsize, it can be the right move for a business that wants to increase its success and become stronger in the future.

Tips for Downsizing

There are some specific ways to make downsizing easier, and some ways that can actually cause more problems for a company that's considering downsizing. That's why it's important to take a look at the tips, techniques, and options that can be used, in order to downsize as well and easily as possible. Here are a few of the most important tips to consider.

• Stay Transparent -- you want to be honest with your employees about what's taking place in the company and why. If you don't do that, you may find that there are a lot of unnecessary rumors getting started.

• Address Rumors -- any rumors that do get started, either by employees or customers, should be addressed as quickly as possible. Putting out an official statement can help reduce the rumor mill and keep employees feeling informed.

• Maintain Normalcy -- it isn't easy to keep things normal during downsizing, but there are ways to focus on making the company more settled, even during a time of transition. A downsizing company should keep things as normal as possible.

• Emphasize Opportunities -- by focusing on the company and what it can offer once the downsizing is complete, it's easier to make employees more hopeful. It's also possible to offer resources for those who are being downsized, in order to make their transition to other companies or options easier, as well.

When a company downsizes, there's going to be upheaval and concern. Those kinds of things are completely inevitable, because a company that undergoes major changes probably won't get through all of those changes smoothly. Still, with the right treatment and ways to handle the situation, it can cause less of a problem than might otherwise be expected.

Storage Units Can Help With Downsizing

A company that's downsizing is probably doing more than laying off employees and eliminating positions. It's also downsizing the material items it owns, and may be getting rid of equipment, storing a lot of things for later sales, or even putting things into storage with the idea of reusing them for another venture in the future. Any company that's going to move to another location, for example, probably needs a self storage facility, at least for a while.

A mini storage option can be a great choice for a company that's not very big, or that doesn't have a lot of things to store. But there are also larger units that can work well for companies, too. Larger equipment or numbers of items may need to be stored that way. If you're in charge of downsizing or storing things for a company, you can find a storage unit near you and focus on getting things moved, to help keep the company on the right track.

Even though it's not always an easy thing to downsize a company, it can certainly be the right choice. It's just very important to do it the right way, in order to make sure it makes the most sense for everyone involved. Staying open and honest with employees during the downsizing is among the best options to be sure that everyone knows what's going on. It reduces rumors, and can also help get employees on board for moving things to a storage unit, selling things off, relocating to another building, and much more.

Taking downsizing seriously, and remembering that it's not just a company but the lives and livelihoods of all the employees who work there, can really help any company do things in the best possible way for everyone involved.

By: Lee Preston
Lee is the Director of Marketing and Promotion for EZstorit.com. When she is not working with our storage facilities partners, she is writing about topics that affect our daily lives.


Recent Posts

  • Preview
    Streamlining the Moving Process: How Self-Storage Facilities Can Simplify Relocations November 19, 2023
  • Preview
    The Ultimate Guide to Preparing and Storing Household Items in Compact Spaces November 10, 2023
  • Preview
    The Green Transition: How Self-Storage Facilities Can Adopt Renewable Energy Solutions October 23, 2023
  • Preview
    Seasonal Storage - Organizing for Better Access October 20, 2023
  • Preview
    The Rise of Smart Self-Storage: How Technology is Transforming the Industry September 26, 2023