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Downsizing employees is never a pleasurable assignment.
The word "downsizing" may even sound catastrophic. Employees work to provide financial support for their families. When employees lose their jobs, providing for themselves and their families becomes quite challenging until they find another job. While downsizing puts laid-off employees in a very tough situation, research shows that those who remain within downsized organizations (i.e. survivors) may even be more severely affected. Although downsizing may be the only way forward sometimes, deciding to lay-off a large number of the company's employees is going to impact not only those let go but also those who survive the layoffs.
According to Ken Blanchard, author and management expert: "Downsizing has negative effects on companies. Early buyouts deplete the number of experienced, talented people, and multiple rounds of layoffs destroy employee commitment. Employees focus on keeping their jobs rather than on doing their best."
Remaining employees within downsized organizations often suffer a range of negative emotions termed by psychologists and consultants as the 'survivor syndrome'. Survivor syndrome referred to a range of feelings experienced by survivors of downsizing such as feeling of grief, anxiety, job insecurity, panic, depression, and stress due to work overload. These feelings eventually lead to lower levels of motivation, commitment, and in turn employees become more disengaged. David Noer, author and consultant, referred to these feelings as "layoff survivor sickness" and even compared it to the same process people go through when they survive car crashes.
Since 2019, many UAE organisations downsized their workforce. For example, in the third quarter of 2019, UAE banks laid off 930 employees and local banks closed down 49 branches. More job cuts among banks and other organisations were expected due to the digitisation drive to employ new technologies to substitute routine jobs with apps and artificial intelligence-enabled technology which was underway in the UAE. Both Etihad Airways and Emirates airlines had also downsized their workforce in recent years due to poor financial results. Dubai's property developer Nakheel also laid off around 300 employees in 2019. Many other sectors were also affected including the telecommunications and the Education sectors.
David Owen, economist at IHS Markit, confirmed: "Employment in Dubai was notably affected, with companies reporting the joint-quickest fall in job numbers seen throughout the 10-year series history."
This fall is no doubt most likely to increase due to the coronavirus.
Khatija Haque, head of Middle East and North Africa research at Emirates NBD, reasoned: "The coronavirus will likely weigh on transport, logistics and tourism - in the first quarter at least."
So, how can UAE organisations overcome the difficulties that arise during periods of downsizing and what effective strategies can they use to guarantee their surviving employees stay motivated and engaged to ensure these organizations maintain their competitiveness?
To start with, UAE organisations should only turn to downsizing as a last resort. Dr. Wayne Cascio Author, consultant and journal editor, proposed alternatives for downsizing during periods of temporary downturns, such as cutting temporary staff, eliminating overtime, offering voluntary retirement, delaying raises, putting a freeze on hiring, and canceling business trips.
When downsizing is deemed absolutely necessary, UAE organisations must follow several effective approaches to downsizing as recommended by professionals and researchers. These include:
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