Downsizing and restructuring are amongst the most challenging situations a leader can face. It’s not just about reducing numbers—it’s about maintaining productivity and morale while supporting the remaining team. In times of change, how you lead will determine whether your team thrives or struggles.
As leaders, we know this balancing act well. You need to deliver tough news, manage workloads, and ensure the well-being of those who remain. The impact on productivity is immediate, but the psychological toll on your team can last long after the decisions are made.
Understanding the emotional impact
Downsizing has a profound effect on employees. While some may experience relief, most will feel anxiety, fear and even survivor’s guilt. Understanding how these emotions play out is crucial. People will move through the change curve, so anticipate and recognise the emotional responses of your team.
Remember, your emotional state can directly influence your team—emotional contagion is real. If you’re stressed or disconnected, your team will pick up on that. Leading with empathy and clear communication helps manage these emotions and prevents morale from dipping further.
Streamlining workflows with a reduced team
With fewer people, efficiency becomes more critical than ever. Using tools like the SIPOC diagram (Suppliers, Inputs, Processes, Outputs, Customers) can help identify inefficiencies and focus efforts on what really matters.
For example, by reducing or eliminating non value-adding steps in a process, you free up time and resources, which is essential when your team is stretched thin. Encourage prioritisation—let your team know what tasks need to be completed immediately and which ones can be deferred. By making these adjustments, you show your team that you’re working to help them manage the workload better.
Distributing workloads fairly and effectively
As responsibilities shift, it’s important to distribute workloads clearly and fairly. Transactional Analysis is a great tool for this—it helps ensure that your communication is respectful and empathetic.
For example, instead of just telling your team, “This is what you’re now responsible for,” take time to explain “We’re going to be adjusting roles, and I want to make sure we’re distributing responsibilities in a way that feels manageable.” Open communication helps prevent burnout, clarifies expectations, and allows for honest conversations about workload capacity.
Mentoring and cross-training are also great ways to support the team. When employees are trained to take on new tasks, they feel more confident and empowered and the team as a whole becomes more resilient.
Supporting well-being
The emotional impact of downsizing lingers long after the initial announcement. To support your team’s well-being, focus on recognising emotional responses and offering continued support.
Regular check-ins and open communication are crucial for spotting signs of disengagement or distress. Offer a safe space for employees to express their concerns and listen actively. A simple, “I hear you, and I understand this is hard,” can go a long way.
Also, consider introducing mentoring programmes or skills training to help employees see a future with the company, even if their role has changed. This investment in their growth boosts morale and helps employees feel valued.
Building a path forward
After the change has been implemented the focus should shift to the future. Encourage your team to embrace a growth mindset by offering sideways moves, new challenges, or professional development opportunities. This helps employees see new possibilities within the organisation and prevents them from feeling stuck.
Providing clarity about the future and showing commitment to their career development will build trust and loyalty, reducing the risk of further attrition.
Navigating these kinds of changes is never easy, but with the right approach, you can manage the operational and emotional fallout effectively. Balancing productivity with empathy and providing your team with the support they need will help them not only survive the transition but thrive moving forward.
The key is to lead with transparency, empathy, and a clear vision of the future.
At Reforge Change we specialise in guiding organisations through difficult transitions. Whether you need help streamlining your processes, mentoring your leadership team or investing in employee well-being we have the expertise to support you.
If you are facing the challenges of downsizing or navigating change, get in touch. Let’s discuss how we can help you lead your team with confidence and care during this critical time.
