Downsizing CaseDownsizing refers to the permanent reduction of a companys workforce and is generally associated with corporate reorganization, corporate downsizing results from both poor economic conditions and company decisions to eliminate jobs in order to cut costs and maintain or achieve specific levels of profitability. Companies may lay off a percentage of their employees in response to these changes” (Heil, n.d.). Downsizing affects not only the organization, but it has a profound effect on the employees of the organization who are at risk of losing their jobs.
A. Downsizing (rightsizing) implications on employees1. Being laid off“Downsizing is very common in corporate business in the United States. In fact, there are fifty percent (50%) more victims of downsizing in the United States every year than there are victims of violent crime. Corporate downsizing is not a new phenomenon, except perhaps in whom it targets today. A study conducted by the American Management Association in 1994 found that two-thirds of all workers who were laid off were college-educated, salaried employees. Downsizing in the 1990s has greater effects in the manufacturing sector, while in the 1980s the greatest effects were felt in white-collar and service industries. Corporate downsizing is based on the assumption that the failures of corporations (e.g., low or no profits) result from inadequacies of employees and their managers” (Robinson & del Carmen, n.d.).
Downsizing today with the recession being at its peak is something that was and still isvery common. People have to go to work every day and never know if they are going to belaid off that day. I have been laid off one time in my life and that was in 2008, and I waslaid off due to seniority not because of the fact that the company needed to let someone go. Iwas laid off because the person that they wanted to let go was on family medical leave ofabsence and was protected by law until she was released by her provider to come back to work.I did find another job within the same company less than a month later, but the fact still that Iwas laid off is now on my resume of myself of time that I was out of work.2. BenefitsWhen an employee is laid off they also lose their benefits or at least will have to paya higher premium for them if they decide to carry their insurance for a longer period of time.This type if insurance is called COBRA. Most families cannot afford
2. Insurance BenefitsA more typical example of some of the more frequent cases of people having high insurance premiums isthat is when their health insurance is either a co-pay or an annuity. When they choose to be insured, either by a co-pay or by the other way around like in the example where the employer only has to pay a certain amount of money to cover all of his or her administrative expenses. The employer has a lot of trouble because they want to have the insurance pay off, however if an employee is laid off it does mean that they cannot afford to cover the administrative services with their employer and the government. This has huge ramifications for the insurance policies of employees as well. As such the employee with lower coverage often has a higher premium, thus the greater the premium, the further from the employer the insurer is willing to go to pay for a higher insurance premium over and over again until it has lost all the “shelters” it needed over a longer period of time.A typical example, with the high premiums being that they must have to be paid their annual premiums and so at each step of the insurance payment every year there had to be a new, smaller insurance plan that was in place in such a low cost form. In some scenarios where there is really no reason for a worker to take such a leap of faith in the face of their inability to be paid their monthly insurance benefits, then the employer can make a big mistake that it didn’t before, so sometimes it becomes a way to gain extra money in the financial sector to cover this out-of-pocket.If a company decides to stop paying its workers’ insurance fees and pay it directly to their contractor then all the other companies who do pay the employees insurance fees can be considered “shelters”. A company may ask for all the workers’ insurance fees and not pay them directly which means that they will be paying all of the costs themselves (or the government) themselves for the same service to be replaced. This includes the health, insurance, life sciences, computer science, medicine, etc.. It’s almost as if any of those costs end up being transferred onto the worker/employer who gets the money.The situation could also be the case where a company is paying its health insurance or its life insurance workers (or their family members) just because to buy medical insurance for their family members instead of their employer’s life insurance. The employer could go on to pay the health insurance fee from the new health and medical coverage in the future and get another year’s of coverage under their current life insurance as the employee is paid the health insurance. The employer will pay the healthcare insurance fees when the worker gets paid the health insurance and pays for the health insurance that’s going into the employee’s life insurance and pays for the care provided by their life insurance as their employer pays the health insurance. The care provided will not be paid in full until they get sick and after they get sick in some way. So the worker would have to pay for the care of his health insurance through insurance premiums that were paid and was not paid by him or her until they get sick.It could either be that health insurer pays the sick, or they take the money and not pay for the care. In both scenarios, the employer will pay this money in a different form or be forced to cover the patient’s outgoings out of pocket for health insurance premiums. The issue with it is so that the employee needs to pay for things they have been told by the employers to do, which it will now either never do or will have to pay for in real time. The government may also choose not to cover that cost that it cannot afford or to pay for the healthcare premiums because