The efforts of these companies in the short term to reduce costs may be seen as a necessary evil but if they are not conducted in the correct manner then these companies run the risk of damaging their infrastructure to such an extent that they may not be able to recover even when the current pressure is removed.

In these uncertain times there are going to be some very tough decisions and some very unhappy people, but that is what has to happen in a lot of cases to allow companies and corporations to weather the current crisis such that when the markets regain their strength these same companies will be able to re-employ personnel and continue to provide a livelihood for their employees and shareholders.

The efforts of these companies in the short term to reduce costs may be seen as a necessary evil but if they are not conducted in the correct manner then these companies run the risk of damaging their infrastructure to such an extent that they may not be able to recover even when the current pressure is removed.

A few years ago I was watching TV and I saw an interview with Rod Eddington, the then Chairman of British Airways. He was understandably complaining about the market share that he had lost to Ryanair, Easyjet and the other budget airlines. But he was also being quite bullish about it. He said that in the previous 3 years he had reduced British Airways operating costs by five percent.

What he didn’t say was that in those same three years he had made Sixteen Thousand of his staff redundant. The question that I have to ask is: How did the people who remained working at British Airways feel when they found out that Sixteen Thousand of their colleagues had been made redundant? Did they feel good about it? Did it make them feel Secure? Did it increase their trust in BA?
I don’t think so.

But think back a few years to the time before the redundancies. Think about the sort of person who used to work for British Airways. Their staff was made up of people who had dreamed at school of being the pilot in the Raybans relaxing in the big seat at the front between Tokyo and Paris, or the stewardess whose flip answer to the question “Where are you going for the weekend” was truthfully and smugly, “Barbados”. British Airways staff were people who competed for their jobs and having won, were living their dreams and getting paid for it. They were proud, motivated, and they cared about what they did.

Three years later and the redundancies had changed the way they felt about their jobs. This is the sort of change that occurs with monotonous regularity in industry. A caring and productive workforce is changed into one that turns up for the pay check and has no other interest in being there. When this happens the value of what is left of the company is considerably less than the sum of the parts.

At the end of the Cold War the armed forces were told that there would be a restructuring process. Everybody knew that this meant redundancies, we had won the war without a shot being fired and now it was time to stand down. The powers that be would not admit that the reason for the restructuring was to make redundancies and when the redundancies came they acted as if they were truly surprised.

To the One Hundred Thousand or so men being made redundant this did not change the fact of their redundancies but it sent the clear message that the people who ran the Royal Navy, Air Force and Army were no longer people to be trusted and that there was no honour in continuing to serve them.

For their Lordships the way that redundant Soldiers Sailors and Airmen felt was of no consequence because they were no longer on the strength. But the following year what went around came around. The year following the final tranche of redundancies the armed forces suddenly found that even at one third of their previous strength they could not recruit sufficient people to fill their requirement. That years recruiting was disastrous and only by spending a small fortune on advertising were they able to bring the numbers up to a level that sustained their new reduced strength.

What they had forgotten was that before anyone joins the services, or any company, they will look for someone who is already there and ask them what it is like to work there, and the story they hear is the story that they will believe.

The Armed Forces and British Airways all suffered the same fate. They lost the trust of their workforces. By failing to take care of their personnel during the redundancies they turned their former employees against them and made it extremely difficult and expensive to recover from the position they had put themselves in.

In most cases the difference between feeling discarded and feeling respected is no more than a kind word and a handshake but for many managers that is still too much for them to do. This cautionary tale is for those managers. It is their organisations who will suffer when business resumes if they don’t take care of their people now.