Restructuring and downsizing is the Workforce Management grouping about reducing or reorganizing the workforce. Four named concepts, and one judgment rule about the order of operations.
The four concepts
Mergers and acquisitions, reductions in force, layoffs, furloughs.
Distractor groups: upskilling, reskilling, redesigning jobs and robotics are workforce planning approaches that change job content rather than reduce the workforce. Strikes, lockouts, boycotts and grievances are Employee & Labor Relations concepts about work stoppages and complaints. Mentorship, cross-training and the 9-box grid are succession planning tools.
Furlough versus reduction in force versus attrition
- Furlough: a temporary suspension of work and pay, intended to be reversed. Placing employees on unpaid leave for six weeks with the intention of returning them to their jobs is a furlough.
- Reduction in force: eliminates positions rather than pausing them.
- Attrition: the gradual loss of employees through separations that are not replaced. It is a workforce planning concept, not an action leadership takes.
- Merger: a combination of organizations, not a workforce reduction method in itself.
Furlough versus RIF turns on one word in the stem: intention to return. If positions go away, it is a reduction in force.
The judgment pattern
Two companies are combining, duplicate functions exist in both, and leaders want capability preserved while duplication is removed.
Keyed first action: conduct an organizational gap analysis of combined capability against future requirements. Organizational gap analysis is a Workforce Management key concept, and mergers and acquisitions sit in the same functional area, so comparing combined capability against future requirements must come before any reduction decision if critical competencies are to be preserved.
Why the alternatives fail:
- Announcing a RIF targeting the smaller company's staff cuts by origin rather than by capability, which is exactly how critical competencies get lost.
- Furloughing both duplicate functions suspends staff before requirements are known.
- Engaging contract workers adds temporary cost without resolving the duplication.
Carry this: analyze the gap before you cut, and cut by capability, never by which company someone came from.