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Is downsizing ethical?

On Behalf of | Jul 31, 2020 | Employment Law

The role of ethics in corporate America is an interesting one. When it comes to employee rights, of course, ethics certainly matter. It’s important to treat all workers equally, for instance, avoiding bias and giving everyone a fair chance.

When it comes to business decisions, though, the issues are a bit more gray. For instance, consider downsizing a workforce. This means laying people off not because of the quality of their work, but due to outside factors. These are often financial and tied to the economy. A company that has seen its sales fall by 10% over the last year may need to reduce its workforce to balance the books.

This does raise ethical questions, and experts note that the best thing for employers to do is simply to tell employees about the impending layoffs upfront. Even if the layoffs are inevitable, it’s best for an employee to have months of warning, rather than coming into work one day to find that their position is being eliminated.

Of course, employees may still question the layoffs. For instance, if all female employees are getting laid off and male employees are keeping their jobs, is the downsizing really just an excuse to discriminate based on gender? Does the company even need to reduce its workforce? If so, is it doing it fairly?

Downsizing is very legal and often necessary. That doesn’t mean it’s not controversial, though, or that it can’t violate employees’ rights in certain situations. All involved need to be well aware of those rights and their legal options.


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