FAQs: When is it time to downsize?


This is a difficult subject that, to be honest, leads to a part of me that loves to wallow in denial.

I find the original question very difficult to answer.

The question I think we should ask ourselves is: What reason am I using for “downsizing”?

I know of many companies who use the method of “bottom line” profit as a reason to let folks go.

These are the same companies that for many years have benefited from these same folks they are letting go.

In my experience, there are basically three types of companies:

  1. A company whose main and only goal is to make the bottom line profit.
  2. A company whose main goal is to create an environment of folks that encourages work to be viewed as play, yet also takes care of the work that needs to be done.
  3. A company that is much like the second one, but still makes a profit.

My goal has always been to be like the third company. With this attitude I’ve managed to survive at least two recessions. My “denial” mostly comes from not knowing exactly when to “downsize” within one’s company, yet keep everyone going until the recession storm has past.

Here are a few suggestions to minimize downsizing. I learned these in past recessions:

  • Rent. How much rent are you paying? In the recession of the early nineties I had several floors in a building. I cut it down to one. This huge savings helped me with my salaries.
  • In the recession of the eighties, I had a wonderful working space. I gave it up and went back to working from my home.
  • In both these recessions, I asked the folks working for me for help. (By the way, they are still with me today). At times I did not have the money to pay them there weekly salary, wasn’t easy for them, but they help me a great deal by waiting.

The thing about being in denial is that most of us prefer to remain in our comfort level. However, the sooner we deal with necessary “downsizing” in difficult times, the better it is in the long run.

For me, letting people go was never an option. Yet, asking for help and dealing with the reality of what needs to be done might be your best chance to survive any recession and become a stronger tribe.

In these challenging economical times, what adjustments have you made to keep going? Do you find that this recession is easing up or getting worse? Is your country or city affected by the recent global recession?