Companies can grow and develop quickly, and that’s often a good thing. But when a company grows too fast, or it expands and divides its workforce into a lot of different jobs, there are times when it actually ends up being bigger than it needs to be. Because of that, it can struggle more than it would if it were smaller and more compact.

If you’re finding that to be the case with your company, you may want to consider reducing your workforce and eliminating positions. That’s not the same as downsizing, as reducing force is a permanent decision. Why would a company want to scale back on a permanent basis? Here are some things to consider.

What Does a Reduction in Force Offer?

A reduction in force means that the company is made smaller, and that some jobs or positions are permanently eliminated. It’s not like layoffs, where people can be rehired and the basic job structure remains. But reducing the workforce can give your company a fresh start, and help it become more focused and directed toward the things that really matter. When a company reduces its workforce in the right way, it moves from an expansive operation where there may be a lot of overlap to something more streamlined.

Streamlined companies that have undergone a reduction in force know where they want to go, and what areas they should focus on for both the short-term and the long-term. Usually, the decision to undergo a reduction of the workforce isn’t made lightly, and it’s one that takes a while to settle on. That’s because some study has to be done into the differences that would be seen if the company’s workforce was reduced. If there’s a lot of bloat that could be eliminated, though, the company may profit from the reduction.

Are Smaller Companies Better Companies?

In some cases, a smaller company may be a better company — or at least it may be more efficient. That’s not true for all companies, of course, and there can be significant differences to consider. But a company that has overlapping people doing the same kinds of jobs, or a company that has people who don’t really do anything may be able to work their way through a reduction in force quite successfully. If they have fewer people doing the same jobs, they’re going to save a lot of money on payroll, for example.

What Happens to Employees Whose Jobs are Eliminated?

When there’s a reduction in the workforce of any company, there are people who lose their jobs. It’s not possible to reduce the workforce, and still keep all the employees. But giving those employees plenty of time to find their next job, or at least be aware that their job is being eliminated, is the right thing for a company to do. That way, the employees understand that it’s through no fault of their own, they aren’t being “fired,” and they aren’t going to be moved to another position at the same company. They’ll need to look elsewhere for employment opportunities.

Would it be Better to Downsize, Instead?

In some cases, it’s better for a company to downsize, instead of undergoing a reduction in force. Downsizing usually isn’t a permanent thing. A company pulls back, eliminates some jobs, reconfigures things, and lays off people. But over time, the company also usually re-expands, or moves into different areas and offers employees opportunities there. That’s not the same as permanently reducing the size of its workforce and keeping it that way. Only you can decide which is right for your company, but a lot of companies that downsize really don’t need to scale back up again, if they operate efficiently.

Where Will the Scaled-Down Company Go Next?

Where a company goes after it’s scaled down through a reduction in force is up to that company. Since these kinds of reductions are meant to be permanent, it’s safe to assume that the company won’t grow in the traditional sense of bringing on a bigger workforce and expanding its job offerings. But that doesn’t mean there can’t be growth and development in other ways. Companies can consider, for example, ways to grow that are based on additional responsibilities, instead of more people.

If you’re part of a company that’s considering a reduction in force, it’s important to have a plan for the future. It’s also not always easy to have that plan, because you can’t predict everything that’s going to be happening in your industry over time. But you can get a good idea of what may occur based on what’s happened in the past, and what your competitors are focused on, too. Make sure you stay up with trends, so you can decide what’s really right for your company and its workforce.

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