The art of downsizing: Communicating lay‐offs to key stakeholders

This paper examines the process of corporate downsizing and its implications for communicating employee lay‐offs. In an effort to please one set of stakeholders (investors, creditors, shareholders, analysts and others), management may be faced with difficult and unpleasant communication choices as they confront another set of stakeholders (employees, customers, community members and elected officials). The objective in each case is to restructure the organisation, control costs and return to profitability without alienating or traumatising the very people who helped create wealth and productivity for the organisation. This paper reviews current practice, an extended case example, and provides ten specific suggestions for planning and communicating employee lay‐offs.