Is downsizing an opportunity to remove underperformers?

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There are a variety of strategic and tactical reasons why the leaders in organisations reach decisions that the number of people in their organisation has to be reduced. I was surprised the other day to hear leaders discussing a significant so called “downsizing “about to occur in their organisation when I heard one leader say “this is a great opportunity to move on the under performers”.

To say I could not believe what I was hearing is an understatement. Reducing people in an organisation large or small is one the most strategic decisions that leaders have to make. Before explaining why, let me deal with this notional opportunity to use these situations to remove underperformers.

If people were underperforming before the decision to reduce staff numbers was taken this is a performance management issue and should have been dealt with when it was identified by people leaders. If downsizing is used as an excuse to remove underperformers, focus should instead be placed on their immediate leaders as they have clearly failed to address the performance issue when it first became evident and it may be the leaders who need to be removed.

Assuming there are clear and compelling strategic reasons for reducing staff numbers then structures will change, which in turn means the roles for those people who remain in the organisation will change in some shape or form as the organisation is restructured. If you are unclear on the strategic reasons for the change then the foundation on which to build is indeed shakey.

In addition to clear strategic reasons some form of compelling vivid picture is vital to describe what the restructured organisation will look like in the medium term ( one year from now), and long term (three years from now) because this maintains focus on three core aspects during the change:

  • Organisational balance and agility
  • Efficiency without loss of competitiveness and service levels
  • Retention, motivation and engagement of the people who are retained

The key question for leaders is “as we move into the future what skills will people need to maintain and strengthen the core of our restructured business?”

Careful analysis is required to identify the critical roles needed, the skill requirements for each role, how roles relate to each other and how every role contributes to or supports the three core aspects. Thus decisions around which people to retain become strategic.

However, here is the leadership conundrum; what if the core skills required for a number of critical roles only reside with those who are deemed underperformers in the current structure? Consider the business impact if these core skills are lost at a time when research on this topic identifies productivity and morale will fall.

Failure to address underperformers at any time results in organisational challenges; challenges that are magnified when an organisation encounters duress such as the need to reduce people. Trying to address underperformance in times of organisational challenge may result in the wrong people being let go and people retained whose skills and experience being retained are not supportive of the organisation’s long term growth and sustainability. Deal with underperformance as it arises.


Vivente Australia enables leaders and managers develop the bond between people and performance, creating a powerful advantage: the synergy between people, leadership, management, and culture, produces performance that allows your business to achieve its best.