So you have a big, complex operation but revenues indicate it needs a bit of downsizing. Nothing new in that scenario. It’s an unfortunate reality of things that you sometimes have to let people go to keep something profitable. Lots of existing knowledge and experience about how to approach that.

Don’t break anything

Your core business functions need to remain intact obviously. Customers are depending on you so you have to be responsible and only makes cuts where absolutely needed and in ways that will minimally affect the customer base. This typically involves a rather protracted period of analysis as you weigh the balance between ROI, company image, future direction, and the scale of the necessary size reduction. You would involve the leaders in various business areas as you gather insight and discuss options.

Graceful sunsetting of products

The product(s) that need to be scaled back or eliminated need to be handled so as to minimally impact your customers. When you announce the downsizing, make the nature of the changes clear and set concrete dates by which you plan to eliminate support for specific products or aspects thereof. Give your customers time to change course. Even help your customers find alternatives. They’ll remember your conscientiousness when they’re in the market for something else. Of course make sure you keep enough people to support the product(s) during the sunsetting phase.

Internal communication

Plan your internal communication carefully. Consult with your corporate attorneys and make sure everything is handled in compliance with regulations and with concern for the lives you’ll be impacting. There’s obviously a balance between secrecy and communication. You’ll have to find that balance. That’s why you’re the big boss. Where possible, inform people face to face. A cold dispassionate email is the easy way out so try to look people in the eye, explain the realities of the situation, and listen to their concerns.

Plan plan plan

Assuming you’ve dealt with this with enough advance notice (and you should have) you’ll need to work out every detail of how to handle the transition. Customers should feel as little pain as possible. They should be informed promptly when the downsizing happens so they don’t read about it in the press and start to panic. But of course they can’t learn about it in advance as then your employees will get word that something’s going down.

Card keys need to keep working up until the actual moment. Network access should be uninterrupted until zero hour and then terminated employees need to be quickly “switched off” so there’s no risk of reprisal.

These things are never easy, as management you’ll be under a lot of pressure. Remain calm, get it right the first time. You don’t want to have a mess to clean up in addition to all the expected changes in your business.

Other business transitions

In the case of actually closing the business, acquisition, hostile takeover or bankruptcy, those are entirely different stories. You may not have the luxury of time to figure things out. This brief article won’t attempt to address the myriad of issues in each of those scenarios. Downsizings are relatively simple, known processes and with enough forethought and prudent execution you’ll come out the other end a healthier, happier business.