Essays on Employee Downsizing at Optus Essay

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The paper 'Employee Downsizing at Optus' is a perfect example of a Management Essay. In this essay, I will critically discuss employee motivation and change management with reference to media reports by Sen (2012) and Mann (2012) on Optus employee downsizing and its implications. Additionally, I will discuss the implications of Optus’ strategy on the organization, the company’ s CEO, staff, and competitors in this market. Recently, Optus Pty Limited has been at the center of several media reports due to controversies relating to its plan to slash 750 jobs.

In a restructuring exercise, the company intends to lay off 750 employees, this is about 8% of its overall workforce in Australia. This move has been subjected to much debate and controversy by stakeholders. It has been welcomed and at the same time criticized by stakeholders, the media, and the general public. This downsizing is set to affect back-office staff, support staff, operations staff, and some managers. The management of the company has defended its move to lay off 750 employees by arguing that this employee downsizing will give way to a new structure that will help to cut down costs, bring about greater efficiencies, give consumers a greater voice and boost profits (Sen 2012).

On the other hand, critics have pointed out that this move could result in poorer customer service and could result in jobs being sent offshore (Mann 2012). Based on these media reports, it has become apparent that in order for Optus to survive in a competitive business environment and boost its profits, the company needs to focus on motivating its workforce and managing change. Employee Motivation Optus' strategy to restructure its workforce by slashing 750 jobs can bring about major detrimental effects to the company particularly with regards to the performance of its employees.

Although the company’ s management predicts that these redundancies would make the company’ s performance more efficient and competitive, the company is bound to experience several challenges. According to Mann (2012), Optus move to lay off 8% of its workforce in Australia could impede the company’ s ability to effectively provide quality services to its existing customers and also make it difficult for the company to grow and expand their business.

A critical look at Mann’ s sentiments on Optus employee downsizing strategy, one can deduce that, following employee layoffs at Optus, there are several underlying factors that could negatively impact the company’ s ability to deliver services. The lack of motivation or morale among the remnant employees is one of the key underlying factors that may impact on the company’ s ability to deliver quality services, after the layoffs. A study conducted by Iverson and Zatzick (2011) established that employee layoffs in an organization can lead to the loss of morale and motivation among the remaining staff.

The findings of this study also illustrated that employee downsizing diminishes human capital in the organization and interferes with work relationships in the organization. Consequently, this can reduce employee morale and productivity at work. Iverson and Zatzick (2011) further recommend that in order for an organization maintain the productivity of its employees or survive after a significant employee downsizing, it is essential for the management of the organization to focus on motivating the remaining employee or building their morale (Iverson & Zatzick 2011).

Similarly, Datta et al (2010) established that employee downsizing may cause a lack of motivation among the remaining employees. Basically, following layoffs in an organization, employees who remain may feel that their job is unstable or that they are not valued. They may develop trust issues or feel overwhelmed by the increase in workload and responsibilities at work. This may in turn affect their morale and productivity at work (Heathfield 2012).

References

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Beecroft, G., Duffy, G. & Moran, J., 2003, The executive guide to improvement and change. ASQ Quality Press, New York.

Datta, D., Guthrie, J., Basuil, D. & Pandey, A. (2010). ‘Causes and effects of employee downsizing: A review and synthesis’. Journal of Management 36(1), pp. 281-348.

Dunphy, D. & Stace, D., 1990, Under new management: Australian organisations in transition, McGraw-Hill, Sydney.

Heathfield, S., 2012, Downsizing survivors: Motivating the employee who remain after layoffs, Retrieved on May 20, 2012 from

Iverson, R. & Zatzick, C. 2011, ‘The effects of downsizing on labour productivity: The value of showing consideration for employee’s morale and welfare in high-performance work systems.’ Human Resource Management 50 (1), pp. 29-44.

Koontz, H. & Weihrich, H. (2006). Essentials of Management. Tata McGraw-Hill, New York.

Mann, T., 2012, Optus job cuts could affect services, Retrieved on May 20, 2012 from

Maslow, A. & Frager, R., 1987, Motivation and Personality. University of Michigan Press, Michigan.

Pride, W., Hughes, R. & Kapoor, J., 2011, Business, Cengage Learning, London.

Sen, S., 2012, ‘Optus to Slash 750 jobs for greater efficiencies’, The Business Times, May 03, 2012

Waddell, D., Devine, J., Jones, G. & George, J., 2007, Contemporary Management (2nd edition) McGraw-Hill, NSW.

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