It is evident to note that since the introduction of technology In a fast changing society, it has both had a positive impact and a negative impact in the lives of people and downsizing introduced the replacement of human workforce in establishments where it was mostly required and that led to a huge influx of unemployment in the society.
Technology downsizing is a process of replacing mainframes and large micro computer applications and software with networks of microcomputers and workstations. Downsizing is done when a company decides to take effect and terminate a huge number of employees at the same time, either to make changes in their staff or to make necessary replacement with technological gadgets that would make working stress free.
The problems most companies face when they decide to go on a downsizing spree is that new technologies get modified to be slightly complex than the last one that was introduced to the company and then they subsequently create new job openings for anyone who is knowledgeable and has the necessary skill set to use and navigate the new technology. Another ripple effect downsizing creates is unemployment that amasses beyond expectation and this unemployment now creates room for the already existing unemployed populace.
REASONS WHY COMPANIES ARE DOWNSIZING
Tech companies made their research and figured out how much price increases for the services rendered by human workforce so they began to make necessary cuts so as to reserve expenses that could be used in getting new mainframe softwares and microcomputers I stead. There are quite a number of reasons Tech companies decides to downsize but I'll be mentioning a few.
1. Controls Cost
Downsizing allows companies to reduce cost by laying off employees when their services are no longer needed and one of the major reasons that makes them take this line of action is as a result of poor/inadequate financial performance or mismanagement of funds in the company.
2. Outsourcing
This is another way companies embark on downsizing because it allows them to source for workforce that would be cheaper and since it's mostly entrusted to contractors they are usually responsible for their own taxes and are rarely eligible for company benefits.
3. Relocation
This helps in reducing excess workforce while taking the business to a different location but in the same country or territory. Most companies many not be able to relocate their entire staff and the best thing for the company to do is lay them off and create job openings in the new location.
4. Offshoring
Unlike relocating which is the transfer of the company to a different geographical location, offshoring simply means moving the entire business/company overseas. There are so many reasons why companies chose to take their businesses to different countries, either for the sake of expansion or to make new networks. Moving and entire staff overseas can be burdensome for a company to handle the expenses so the best alternative is to lay them off and save cost.
5. Automation/Technological Advancement
If an organization work process is extremely fast and easy for employees to do, then this can also be a good reason for downsizing. Some automation and AI applications that are integrated into companies can allow them to be more productive and allow work to be done efficiently and at a consistent rate than human beings could ever pull off.
6. Economic Crisis
This is the single and biggest cause of downsizing. In 2022 and 2023 the Microsoft corporation cut down about up to 5% of their workforce and the reasons for the large amount of the layoff was as a result of economic downturn and certain structural changes that may affect Tech companies.
7. Mergers
This is certainly one fast way that companies layoff their staff, many workforce usually get duplicated and instead of having too many people in one position, companies downsize as a result of the presence of excess staff.
ADVANTAGES OF DOWNSIZING FOR COMPANIES
In as much as downsizing has a negative impact on employees and the economy at large, it also has some benefits that companies use to utilize in the work environment to make their work to be more to be efficient.
1. Creative Approaches
There are certain steps companies take in order to get creative with how work gets done in their companies. It is efficient for companies and it saves money and jobs that may closely mirror other competitors.
2. Less Maintenance
Companies that undergo downsizing often channel their maintenance resources to other departments that require more attention and the moment most staff get laid off, those resources can be used to cater for those needs.
3. Increased Profits by Reducing Overhead
This strategy aims at allowing the company to have a rethink of how the company can move effectively while cutting down of cost and maximizing profit and this redesigns the workload of the employees in the company.
4. Redesigning work
Redesigning the workforce of employees to be seamless is one of the strategies that companies value the most. It gives them a scope to constantly make changes that would help change the dynamics of how work can be done efficiently in a company.
We acknowledge the fact that technology is fast changing and seamless and what it does is to make life simple for people but it invariably takes away the source of income and means of livelihood from other people for example, The mailman at the post office no longer has a job to deliver our letters because we now have a faster way of getting it done from our comfort zones while using our gadgets.
There are a few tips for tech companies who would decide to undergo a downsizing to put into consideration for the sake of their employees, they are;
- Transparency and Communication
Leaders in every tech organization are obligated to be transparent about the affairs that goes on in the company and communicate with their employees efficiently in order to know where lapses occur and make deliberate attempts at fixing it, and if they are subsequently going to layoff their staff then they are also obligated to communicate in detail the reasons the company chose to go down that path and also explain to the rest of the staff that which is required of them in events the downsizing commences.
- Acknowledge the uncomfortable truths
It's rather difficult but the onus falls on the employer to make it known to his employees the genuine reasons behind the downsizing, either as a result of an economic Crisis or financial situation if the company it has to be brought to the notice of everyone that works in the establishment in all honesty.
- Reasserting company’s commitment to the staff
In terms of stress, economic Crisis or company difficulties, it is the obligation of the leaders in the company to communicate in times of uncertainty so the staff are reminded of the commitment to the mission as well as their role in achieving that mission and this helps employees to find means of security in insecure times.Giving them a detailed explanation behind job stability and its fears
Downsizing is one of the most difficult and dreaded decisions that any Tech company or commercial industry decides to embark on. Laid off employees must be duly reminded that their efforts in the company are duly appreciated but it is in the best interest of the company to take decisions that doesn't cause a ripple effect on their benchmark.
CONCLUSION
Technology downsizing has both positive and negative impacts on people who work in a Tech advancing sector so the best word of advice anyone who decides to learn a tech skill should be for them to constantly learn new things in the scope of their tech skill. Technologies are bring improved every single day and software or any other micro computers that were used to develop those technologies are eventually going to be discarded, so the best thing anyone in tech can possibly do for themselves is to keep learning Tech courses that provide new information and advance your knowledge about the things you already know in the Tech space. The moment you do this the effects of downsizing isn't going to take it's full effects on you when it happens, retainment from the Tech company might be in your favor, otherwise there will be other positions available for you the the new skill you already know in your Tech career.
