The Herman Trend Alert|
May 9, 2000
Downsizing Will Continue
236 days until January 1, 2001
In spite of our strong economy, we haven't seen the end of downsizing. Corporations will continue to remove people from their payrolls for years, but for different reasons.
In the past decade, thousands of companies tightened their personnel budgets, reacting to escalating costs and difficult economic circumstances. The period from the late 1980s to the mid-1990s will be remembered with emotional pain by many families, as well as employers who agonized over the need to reduce overhead. Cutting all those positions was dramatically counter to corporate cultures, cultures that had nurtured relationships with workers in a rather paternalistic management environment.
The impact of the downsizings was striking, causing significant upheaval in the social fabric of employment. The cradle-to-grave relationship between employer and employee evaporated, leaving bewildered workers to wonder what happened. They'd done nothing wrong; why were they suddenly and unexpectedly out of work? These workers were victims of a tidal wave over which they had no control. And, worse, there was nothing they could do to reverse the situation. There was nowhere else to go-most prospective employers were also laying off their workers.
Then came the mid-1990s and economic growth-growth that came gradually, then surged into a boom economy. Life was much better now. There were plenty of jobs, plenty of business. The good times had returned.
The downsizing continued. But now the corporate motivation is different. Savvy employers, increasingly sensitive to their competitive environments, are working diligently to become considerably more agile and nimble, highly responsive to rapidly changing marketplace, supply, product development, and labor conditions. In a period of continual flux, success comes to those who can be very flexible and quick.
Now the downsizing is more surgical, more focused, than the mass layoffs of that earlier era. Today employers remove departments, job functions, and even divisions that aren't tightly aligned with their ever-evolving missions. They're reshaping, sculpting, applying appropriate strategies for today's operating conditions.
The workers? They're doing fine. In spite of losing one job, with our healthy economy they have more jobs-good jobs-waiting for them. Layoffs are now opportunities.
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