This report provides an insight to the risks, costs and problems that ABN AMRO management
may face and should consider while executing downsizing. Various risks and problems are
explained and recommendations are made to minimize them.
The potential risks such as vengeance of laid off employees, morale deflation of survivors, and
slump of creativity are discussed in detail. The financial impact of improper downsizing such as
legal cost and retaliatory behavior costs are discussed. In addition, we have suggested ways to
minimize these costs. The various types of problems that are generally faced by the managers
who execute downsizing are discussed at length and an insight about how these problems can
be avoided is discussed.
ABN AMRO management should prepare a thoroughly planned and time bound strategy for
downsizing. Management should make its concerns known to the employees and seek their
input before starting to downsize. The reasons for downsizing should be clearly communicated
and discussed in detail with all the employees including the survivors.
This is important to keep
the morale of the survivors high in order to avoid unrest among them. Employees being laid off
should be treated with empathy and dignity and advance notice should be given to them.
Management should provide career services to the employees and provide training which
would be of help to find another job. The way management treats the laid off people will have
tremendous impact not only on the survivors but also on its image.
The managers or supervisors who will deliver the final message to the victims should be trained
so that they can handle the situation in a desired and consistent way. The training should focus
not only on the external challenges from the situation but also on the internal challenges that
managers and supervisors might face...