Use Downsizing as a Last Resort: Some Alternatives

  • Rely on attrition to right size.
  • Use redeployment and make layoffs a last resort. Hewlett Packard used this strategy extensively throughout the 1980s as it faced intensified competition. Employees were given three months to find a job in HP and were helped to do so. If they could not find an equivalent level job, they were offered a lower level job. If they preferred not to take that job, they were given generous severance packages.
  • Ask for volunteers who want to take extended vacations, a sabbatical, leaves of absence, or a shorter work week.
  • Ask everyone to share the pain by taking a pay cut. Senior management should take a larger one. Hewlett Packard used this approach several times in its early history.
  • Shorten work weeks and offer stock options in return.
  • Lend employees to not-for-profit firms and pay the difference in their wages.
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