Downsizing has a negative impact on employee morale and how the overall workplace functions.

Savings gained from staff reductions may be offset because of declines in other areas (e.g. work performance and customer service). Remaining staff may feel overworked and stressed about job security, and finding and hiring new workers when business improves can be costly and time-consuming.

Alternatives to Downsizing

The federal work-sharing program can help you avoid layoffs. This program provides income support to employees who are eligible for Employment Insurance and who are willing to work a temporarily reduced workweek.

Also check the Employer Sponsored Training Program. It can help employers with financial assistance for training for employees who would otherwise lose their jobs.

For more on how to avoid layoffs, see our Workforce Reduction Program section.