Downsizing Checklist

The business decision to downsize is complicated and difficult. Having a well thought through plan, including outplacement services and support allows for a better outcome for employers, “surviving” employees and potential future rehires.

• Determine need for downsizing; analyze processes and procedures for improvement or possible layoff avoidance.
• Prepare a policy in advance of the decision to downsize, stating selection criteria (seniority, performance or job elimination) and what regular pay, severance, and vacation will be paid.
• Complete an adverse impact analysis and avoid unintentional bias. For example, if a disproportionate number of women, employees over 40, disabled employees or employees who are members of some other protected class are selected. Consult with an employment law attorney.
• Prior to a layoff or reduction in force, some companies poll employees to determine whether anyone wishes to voluntarily resign or retire early. If employees do volunteer to separate from the company, they should be given the same severance pay other employees will receive.
• Check if your company meet conditions of the WARN Act that requires a 60 day notice before a plant closing or mass layoff? http://www.doleta.gov/programs/factsht/warn.htm
• Are employees covered by a contract (including a verbal agreement or binding policies/practices); be sure to follow all steps in the contract or other relevant documents.
• Prepare a communication plan for employees impacted by the downsizing and for the “surviving” employees as well as public announcement for response to inquiries.
• Plan meetings to notify employees of the downsizing; where to hold meetings; who will make the announcement; know the reduction in force process and content of separation materials (pay continuation, forms, outplacement, etc.); practice and rehearse the message to be delivered.
• Consider giving employees time to look for a job before the layoff date.
• Prepare general release forms or severance pay agreements.
• Develop a check list and make sure you collect company property: keys, credit cards, cell phones, laptop computers, etc. on employee’s last day.
• Address all security concerns and bring in security personnel or notify internal security to manage any disruption to the workplace or if you have a legitimate fear of potential violence.
• Protect your company’s computer system by turning off employee email and disabling passwords as soon as feasible.
• Prepare information for employees indicating when payroll checks will be issued, any severance payment, how health insurance and retirement plans will be handled, how to obtain COBRA, outplacement services, Employee Assistance Plan (EAP), and whether references will be provided. Include a list of questions and answers which address the majority of questions employees may ask pertaining to benefits.
• Remind employees of any non-compete agreements, non-disclosure agreements, and non-solicitation of employee agreements or similar documents that are effective after termination. Provide a copy for the employees for their personal record.
• If available, provide employees with list of all in-house training courses completed or certifications received for inclusion in their resumes.
• Obtain current addresses for mailing W-2’s, etc.
• Take care of the “Survivors”. Work to retain remaining employees; avoid burnout; provide training to reduce the frustration and anxiety employees feel about the new work downsizing brings.
• Provide counseling service for employees and/or contact your Employee Assistance Plan provider for on-site counseling or brochures.
• Work with Workforce Connection to inquire about any employment opportunities, and communicate this information to the separated employees
• Select a quality outplacement service focused on your needs. Workforce Connection provides services at no charge to employers. Their professional approach focuses on helping the individual conduct a successful job search and to make an effective career transition.
  • Services include assistance with registering for unemployment benefits, job fairs, local and out-of-area job search assistance, resume development/critique, interviewing skills and other available training classes through a partnership with CFCC.
• Plan to potentially avoid future layoffs.
  • Contact Workforce Connection for incumbent worker grants and training programs through the CFCC partnership to help upgrade your workers’ skills.
  • Contact the local EDC for any available incentives your business may be eligible for including equipment purchases and relocation assistance.
A layoff or reduction in force is never pleasant, but if you have a game plan, it makes the whole outplacement effort much easier. If layoffs are necessary, take steps to conduct the layoffs respectfully, address your company’s concerns about security when workers leave, and boost the morale of the remaining workers.