Downsizing, a trend in business management

Have you ever heard of downsizing? Downsizing is a management concept or technique that encourages internal restructuring that makes it possible to reduce costs, including a reduction in the number of employees, in order to maintain the performance and profitability of companies seeking a strategic solution to grow or remain competitive.

In this publication, we will present the advantages that this administrative restructuring presents for companies that need to cut costs and unnecessary processes, without losing quality performance. But we will also address the care that downsizing requires.

The application of this technique must be planned, in addition to complying with the company’s general strategy, as downsizing has advantages and disadvantages. Here are the points that need to be evaluated to prepare the company and make this new experience viable:

Prepare for the reassessment of processes and staff reduction

Downsizing does more than just reduce costs with the company’s physical structure and staff, it allows the company to modernize. It is an excellent opportunity to assess and restructure processes – especially how they are performed – and redefine the roles of each professional. All this in order to find ways to adapt to the new market reality and current budget of the company. This reorganization encourages the adoption of tools and practices (example: hybrid work model) that allow you to do more with less.

Just as in a period of expansion, for example, companies are looking for a greater number of employees to reach established goals, there are times when it is necessary to streamline the staff. In other words, when the expansion objective is reached, in order to maintain financial sustainability, the company may need to reduce the number of employees. Companies need to know how to adapt to their needs at any given time, without affecting the quality of services or products they deliver.

Prepare to enable increased efficiency and productivity

Team management can be a greater challenge when there are many, especially when there are different professionals occupying very similar positions. Downsizing optimizes the use of company resources, allowing better use of human capital, which favors an increase in efficiency. Having a lean workforce, with a reduction in hierarchical levels, leads to a reformulation of the functions of professionals, creating a more flexible scenario, in which each employee can have more autonomy in the exercise of their activities. The combination of these factors tends to make the professionals’ potential better used. Improving efficiency results in increased productivity and vice versa. When the company reduces its headcount, it needs to focus on the needs and attributions of each one, with more attention. By doing this assertively, it creates more adequate conditions for professionals to become more engaged and motivated to perform their roles better.

Prepare for the discomfort caused by layoffs and loss of talent

It is the employees who guarantee the success and growth of companies. Surprisingly, there are managers who are not convinced about this fact. Thus, in crisis situations, they implement cuts without planning and without effort to retain even the talents and professionals who present high performance in the company.

Even if the company makes these choices well about who to cut and who to keep, it may need to dispense with more skilled labor than it would like. This is one of the reasons why downsizing can lead to the loss of talent to the competition. There is also a risk that leaders and employees who were kept may feel harmed by the change or simply dissatisfied with the restructuring.

It is important to note that, in any process that involves dismissals, there is a risk that the decision will be misinterpreted. The reason for the downsizing (for the restructuring) must be communicated in order to minimize the impact of layoffs. Losing a job is not pleasant, but if the worker understands what is happening in the organization, there is a chance to face the situation without damaging the company’s image.

Prepare for the adoption of the hybrid working model

When the company is working with a smaller team, after reducing payroll expenses, it will also want to reduce the size of its offices or use coworking, thus reducing expenses with rent, electricity bills, etc. For this reason, adopting the hybrid model, allowing for a rotation of the physical presence of employees, also generates cost savings. The option for the hybrid model will even allow the rental of a space for 20 employees, even if the team has 80 professionals.

Now that you understand the concept of downsizing better and that it is not a choice to be made in any context, but when it is the best solution to keep a company operating and sustainable, you need to meet MyHive.

MyHive will significantly help, in a different way, your company adapt to this new scenario. It is a physical office on your computer screen that allows you to customize the number and types of environments/rooms, in order to get as close as possible to your company’s internal appearance. Each room can be used in the way your team already uses it at the company: Finance or Marketing department, meeting or management room, reception or breakout space. Each user stays in the department to which they belong and can only hear or speak to those in the same environment as them. If you need to participate in conversations from other rooms, just move to that room.

The creators of MyHive know that, in the hybrid work model, platform users who are in the physical office, or coworking, need to interact, effectively and whenever they want, with colleagues who are working remotely and vice versa. That’s why MyHive even makes it possible to visually distinguish remote users from those in the company’s physical office. At MyHive, each user is represented by an avatar that shows their status in real time: online, away, busy and whether they are in “Remote” or “In the Office” mode. If the user selects “Remote” (the default setting), the avatar will be rounded, indicating that it is not physically in the office. If you select “At the Office”, the avatar will be a square, indicating that you are physically at the office.

Discover how MyHive is perfect for the hybrid future and can change your company’s work routine. Try MyHive for free and be amazed: MyHive.Global.