2. Module Learning Outcomes
Discuss legal and social ramifications of employee termination, as well as
those of downsizing an organization
11.1: Discuss the impact of downsizing on the organization and
employees
11.2: Identify the legal and social effects of terminating an employee
4. Learning Outcomes: Downsizing and Rightsizing
11.1: Explain downsizing and rightsizing and the influence they have on an
organization
11.1.1: Describe the effects of downsizing
11.1.2: Describe the effects of terminating employees during
organizational downsizing
11.1.3: Describe how to downsize without downsizing morale
5. Downsizing and Rightsizing
• Downsizing: When a company terminates a large number of employees at
similar times to cut costs
• Rightsizing: When a company restructures their organization by reducing its
size
• Reasons for downsizing:
• Tough economic conditions
• Merger or acquisition
• The end of a product or service
6. Termination Risks when Downsizing
• Companies may face the following
challenges during the downsizing
process:
• Loss of knowledge and experience
• Increased workloads and pressure on
remaining employees
• Loss of trust and security
• Legal ramifications
• Impacted client relations
7. Downsizing Without Downsizing Morale
• Communication is key
• Provide additional support to
remaining employees
• Create a fun and engaged work
environment
• Prioritize respect and
understanding
8. Practice Question 1
Which of the following is NOT a reason for downsizing
A. Challenging economic conditions
B. Merger or acquisition
C. Crowded office space
D. Discontinued product/service
9. Practice Question 2
True or False: Both terminated and remaining employees are impacted by
company layoffs.
A. True
B. False
10. Practice Question 3
True or False: After downsizing, it is important for companies to create a fun
work environment to help distract the remaining employees from recent layoffs.
A. True
B. False
11. Class Activity: Witnessing the Effects of Layoffs
• Give each person in the class three post-it notes and ask them to write a
three letter word using one post-it for each letter (example: dog, with d on
the first post-it, o on the second, and g on the third)
• Next, the teacher will walk around the classroom and knock on 1/3 of the
students’ desks. These students have been laid off and must place their three
post-it notes on the desks of their classmates without asking for their input on
which letters they would like to receive.
• The students who receive the additional post-it notes must now try to spell a
new word with the letters they were given.
• Discuss the following as a class:
• What do you think the post-it notes represent?
• What challenges do students face when reworking the letters on their post-it notes?
• How do the laid-off students feel?
• What can the teacher/manager do to help the situation?
14. Learning Outcomes: Legal and Social Effects of
Termination
11.2: Identify the legal and social effects of terminating an employee
11.2.1: Identify ways to legally terminate an employee
11.2.2: Identify ways to ethically terminate an employee
11.2.3: Discuss laws surrounding termination
11.2.4: Discuss the reasoning behind laying off an employee or firing
them
16. Termination Laws
• Employee Protection Laws:
• The Civil Rights Act of 1964
• Equal Employment Opportunity Laws
• Family and Medical Leave Act
(FMLA)
• OSHA Whistleblower Protection
Program
17. Advantages and Disadvantages of Terminations
• Advantages
• Reduced overhead and costs (downsizing)
• Elimination of underperforming employee
(firing)
• Disadvantages
• Loss of knowledge and skill (downsizing)
• Gap in staffing needs (firing)
18. Practice Question 4
Which of the following is an illegal criteria to use to determine which employees
to layoff during a company downsize?
A. The employees most recently hired
B. The underperforming employees
C. The employees with the lowest sales
D. The oldest employees
19. Practice Question 5
Which of the following laws/legislation protects a person from retaliation for
coming forward to divulge information about illegal action in their place of
work?
A. The 14th Amendment
B. OSHA Whistleblower Protection Program
C. The Civil Rights Act of 1964
D. Equal Employment Opportunity Laws
20. Practice Question 6
True or False: Laying off an employee is the same thing as firing them.
A. True
B. False
21. Class Discussion Questions
• Why do you think some managers struggle with employee terminations?
• What are the differences between laying off an employee and firing them?
• What is the difference between law and ethics and why should they each
be considered when terminating an employee?
• What would you do to increase and maintain morale after mass layoffs at a
company?
22. Quick Review
• Reasons for downsizing:
• Tough economic conditions
• Merger or acquisition
• The end of a product or service
• Impact of downsizing:
• Lost knowledge and expertise
• Same workload, fewer employees
• Reduced overhead and costs
• Law and Ethics:
• Do not discriminate
• Follow policies and procedures
• Consistency is key
