Board guidance in layoffs

It is important that boards ensure they are done right, as they impact long-term organisational health and future success.

Published Sun, Sep 13, 2020 · 09:50 PM

Board of Directors

RETRENCHMENTS, at any time, are difficult moments in a company's journey that warrant in-depth consideration at the board level. As the pandemic takes its toll on businesses, retrenchments across the different sectors have surged in recent months.

While retrenchments are operational actions under the purview of management, it is important that boards ensure they are done right, as they impact long-term organisational health and their future success. Boards should guide companies to focus on the broader picture, as well as monitor and evaluate the impact of laying off employees.

Preserving the company's DNA

Companies need to take a balanced view in their retrenchment efforts - exercising judicious downsizing to allow for business continuity and yet retaining a sufficient talent pool to support the projected business upturn when the economic situation recovers. Poorly-managed downsizing can lead to loss of industry expertise and institutional memory, and a negative impact on the morale and motivation of the remaining employees. W…