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What Happens to Employees During a Downsizing?

One of the most common mistakes that many companies make when they attempt to reduce costs is both over- and under-react to employee concerns. Many companies pay too much attention when their employees become frightened of their customers. But they tend not to pay enough attention to honest employee concerns about their own futures and careers.

Very often, employees are more devoted to the services provided by their company than the customers are. One Vice President of a large midwestern organization was convinced that their marketing effort would be severely affected by a reduction in the number of product demonstrations given to shoppers in grocery stores -- even though statistics showed that the demonstrations had little impact on sales. Even after the demonstrations were eliminated without a significant impact on sales, the Vice President still felt that the cutbacks were a mistake. When employees devote a significant amount of their careers to a certain program or product, it is nearly impossible to convince them that the program or product no longer has value to the customer.

On the other hand, employers need to be as sensitive as possible to the emotional trauma that comes when jobs are changed and comfortable organizational environments are restructured. The best organizations view cost control as an ongoing event, rather than one dramatic jolt. When employees are trained to continually reduce costs, the reduced morale associated with layoffs and shutdowns can best be avoided.

Q. I love working for my company, but there is one company policy that is runing my life. The company makes us leave for our business trips on Saturday, so that we can use the cheapest possible air fare. Naturally, this is destroying my weekends and disturbing my relationship with my family. I realize that cost cutting is important, but isn't this going too far?

A. Unfortunately, some companies make cost-reduction efforts that cut directly into the quality of life of their employees. If it can't be avoided, the company should show that it is avoiding layoffs by asking employees to make such sacrifices. But the company should also be scrupulous in determining if alternatives exist. Let's look at this particular situation.

Airlines usually charge less for flights that extend over a Saturday night, because people who stay over the weekend are likely to be leisure travelers (who are generally price-sensitive) rather than business travelers (who generally aren't). So your goal in staying over on a Saturday night is, in essence, to "fool" the airline's computer reservation system into thinking that you are a leisure traveler. So let's think about ways to fool the computer without actually leaving on a Saturday.

Assume that you are traveling from New York to Los Angeles. The fare during the week is $980, but if you stay over on a Saturday night the fare becomes $390. You have to leave New York on Sunday night and return on Wednesday, but your boss insists that you leave on Saturday night to get the cheaper fare. Try offering the following options to your boss:

Book two tickets: One leaving New York on Sunday night and returning a week later, one leaving Los Angeles on Wednesday and returning a week later. Throw the return portions away. You've still saved your company $200 in airline fares. Not as good as the $590 you'll save with one Saturday night ticket, but maybe your boss will compromise.
If not, try scheduling a second meeting in advance. If you know that you'll have another meeting in Los Angeles next month, set a definite date for that meeting. Then buy one ticket so that you leave New York on Sunday night for your first meeting, and return next month at the end of your second meeting. Buy a second ticket that leaves from Los Angeles at the end of your first meeting, and returns you to Los Angeles for the start of your second meeting. The airline's computer "thinks" you've got a Saturday night stay built into each ticket, and therefore charges you $390 for each ticket -- and you spend your weekends at home.

By exercising creativity, you may be able to accomplish your boss's cost-reduction goal with a lot less inconvenience to you.

NOTE: This column was written in 1994. Subsequent changes in airline reservation systems and requirements make it much more difficult to arrange tickets in this manner, and may result in full fare being charged for your tickets. See your travel agent for further information.