Layoffs: Healing Both Sides

Posted on February 05, 2003

Posted By: John Reed

It would be tough to remember a week recently when there was not news of energy jobs being lost. Layoffs are now the norm in our industry and others. They create two different groups of victims – those axed and those spared. They also change the corporate environment and the skills needed to survive in it. A Novelty Becomes Routine
Pick a nice euphemism: downsize, reengineer, streamline, reposition, reallocate, refocus, restrategize or, more recently, rightsize. There are endless ways to ‘spin’, sanitize and legitimize the harsh cutting of people from payrolls. Some executives remember 30 years ago when layoffs were startling, embarrassing, and new. Mergers and “hostile” takeovers started threatening businesses that were marginally competitive and fat. One such business must have opened Pandora’s Box, discovering it was possible to disguise sloppy operations by cutting costs (employees) to boost short-term earnings. That income boost was enough – sometimes - to distract the attention of corporate raiders looking for wounded companies. It was also a painful public statement that your firm was in trouble. Since then, when the economy was relatively stable and layoffs were a desperate last resort, competition and risks have increased. We all know global markets, technology, regulation and corruption make the ice thin for everyone. Downsizing has emerged as a regular, accepted way to manage through the business cycle. Ironically, we are at the point where stock analysts devalue firms that are not downsizing. Pressure to cut is constant, even if the only logic for it is a temporary and by no means certain rise in earnings per share. Leaving
Who are victims of downsizing? Most attention and corporate resources focus on people who are let go. They suffer financial stress and a sudden emotional loss - often as severe as the death of a family member. They might consider the following to get through a layoff trauma:

Allow yourself to mourn the loss; imagine the process you would expect to go through in divorce or if a terrible accident took the life of friend - give yourself a breather and a reasonable chance to grieve so you can move on.
Don’t blame or punish yourself for something you had little to no control over
Give yourself fair credit, a “pat on the back” for past contributions and for skills you learned in the former position;
Fight the natural tendency to slow down, retreat, and isolate yourself; have a daily goal - talking with 3-5 people to vent, network, get advice, or any combination of these
Prepare financially; if possible have 6 months of expenses saved for this emergency
Prepare strategically; keep a fresh resume, build skills with training or education, network regularly, engage with professional associations, and always be “active in the job market”
Remember your situation is temporary - an unusual chance to reevaluate and “re-launch” your work life; focus on defining and then winning an optimal new position and, as you would for medical or legal needs, buy the best professional expertise you can afford

Staying
Most downsizing efforts do not generate anything close to targeted results – usually due to the negative effects on survivors (e.g., low morale, reduced motivation, top performers jumping ship, lost productivity, increased conflict). Employees left behind after a layoff have a paycheck and a degree of self-esteem, at least temporarily. But they don’t have much else and their new problems can be overwhelming. Survivors are battered emotionally. Their trust level – at best – drops to minimal. There’s guilt, anxiety and confusion - why were they spared? Why were best friends and colleagues, who seemed to contribute as much or more, selected to go? How long before the next wave of job cuts, and why would they be spared again? What is there to look forward to? Some survivors get new or changed job descriptions – are they prepared with the skills needed? Some do more work – for the same compensation – to make up for lost staff. Where do they get time and energy to adjust to their new demands? As survivors are forced to adjust, work harder and smarter, dig in and “suck it up”, they question if their firm will even survive. Have basic corporate strategies improved (unlikely)? Are competitors suddenly weaker or more vulnerable (no)? What’s “management” thinking, and why? To cope as a survivor, consider the following:

Seize the opportunity – you’re supposed to produce more and perform different tasks now, so it may be appropriate to talk with your boss about professional development. Take initiative; what new training and education do you want and how will it be provided for you? Once you secure it, use the training to build skills that make you more of a contributor and, at the same time, more marketable – to increase your confidence, energy and self-esteem and to focus you (like your laid-off colleagues) on being active in the job market.
Remember even though you kept a job, you may still need to go through a grieving process over lost friends, dismembered work teams, or valued bosses who are gone; again, give yourself enough “slack” to mourn and adjust so you can move on.
Expect to experience many of the same reactions to stress as laid off employees – low motivation, confusion, depression, physical illness or exhaustion, fear, anger, mistrust and frustration – and get help.
Review and refine your priorities; reduce uncertainty by finding out specifically what performance is now expected of you – so as you face new or unfamiliar tasks, you first do the ones most valuable to your boss and your customers.
Consider – particularly in large firms, layoffs in one division or city do not mean a lack of opportunity elsewhere in the company – so network across and outside your organization.

Tactics for a New Era
Businesses imitate each other – the “herd mentality”. The ‘layoff button’ is now one of the first pushed. Odds are sooner or later we will each be in one or both groups of victims – those cut and those surviving – so it helps to know and prepare for the challenges facing each.

Authored By:

John Reed

John Reed is the Managing Principal of QRA (www.quinnreedassociates.com), the corporate psychology consultancy headquartered in Houston. A licensed corporate psychologist and certified executive coach, he has worked globally for 20+ years with corporate leaders, entrepreneurs and their organizations in the retail, energy, financial services, real estate, manufacturing, health care, technology, chemical, utility, food and spirits and not-for-profit sectors. QRA provides executive assessments for hiring and promotions, executive coaching, strategy consulting,

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Comments

February, 04 2003

Joseph Mathew says

Another excellent and different article by Mr. Reed. I think these types of resources are important to know for personnel on both sides of the "restructuring" desk. It is important to maintain faith in the Keynesian economic model of a economy running at its maximum current potential without full employment. For those laid off or terminated due to downsizing, there should be no wound to the ego, especially if such employee has the skill sets to succeed. These are just normal occurences in corporate America, and most people who are still at the firm are no better than you, and quite often, less skilled/productive but just more political or protected.

Although that logic doesn't pay the bills, skilled players will always find a home, or better yet, create their own value elsewhere.

Very interesting and stimulating article. A fine blend with the rest of these articles on EnergyPulse.

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February, 05 2003

Robert Wilhite says

A very timely and thoughtful article from Mr. Reed. I, like many in this industry, have long known what it is like to be in the "Staying" category, often finding it to be difficult to cope with the sudden gaps in knowledge or experience of others you have come to rely upon. One of the key ways I have learned to deal with this is simply to keep an open mind and endeavor to learn new skills and broaden your own horizons. And, keep your resume up-to-date.

After recently finding myself in the "Leaving" category for the first time in my career, I realize that it does offer a great opportunity to reevaluate and position yourself. Based on signals from former "Staying" colleagues, I feel I may be better off in the long-term, both financially and emotionally. Although the economy is quite challenging at this time, I have learned that the power of networking is the ONLY way to secure solid leads and a new career start. Friends, colleagues, and even family members are more than willing to talk, share leads, and offer suggestions. I applaud Mr. Reed for emphasizing this point more than once and explicitly recommending the notion to "give yourself fair credit" and stay active.

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February, 05 2003

Clay McKemie says

Thank you for another insightful and helpful article. Also having been recently in the "leaving" category has helped me be more resourceful and prepared for the future. It is refreshing to see that it is possible to find more rewarding and refreshing challenges ahead.

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February, 11 2003

Paul Taube says

Your comments, as pointed out above, were very insightfull and relevant to the current industry state of affairs. I particularly enjoyed how candid you were about the corporate environment and corporate strategies. It appears that rorganizations are ill conceived with overstated potential benefits and staff reduction targets. Studies that I have read indicate that staff reduction targets and cost saving goals are typically not met. However when earnings are bad upper management can keep their jobs by announcing big cost savings. What usually isn't stated is how the company plans to grow sales and employment after after all the cuts are realized.

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