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Bain Survey Sees Spike in Plans to Downsize

April 6, 2009

Bain & Company's just-released Management Tools & Trends survey says that 59 percent of executives interviewed globally plan to downsize in 2009; this is unsurprisingly up from 2008. Just 37 percent said they did not downsize in 2008 nor plan to in 2009.
An overview:

  • 71 percent think that government regulation of business will increase over the next five years.
    77 percent of North American respondents think that this will be the case

  • 71 percent feel that the current downturn will change consumer behaviors for at least three years 70 percent are very concerned about meeting growth targets in 2009.

  • 64 percent are planning for a downturn that will last at least until early 2010. This sentiment is felt equally across all regions

And what Bain noted as the bright side:

  • 75 percent of executives feel that their company will use this recession to improve their competitive position. Only 69 percent of North American executives surveyed agree.

By size …

  • 69 percent of executives at large companies (more than $2 billion in sales) are planning for the downturn to last until early 2010; 58 percent of small companies (less than $600 million) agree.

  • 41 percent of executives at large companies say their company will have significant layoffs in 2009; 31 percent of executives at small companies agree.

A senior partner with Bain and author of the survey, Darrell Rigby said: "But executives need to think carefully about the design of their downsizing initiatives. The way layoffs are implemented can have a lasting impact on a company's culture, and Bain's calculations show that unless jobs are eliminated for at least 6-12 months the company will fail to earn a financial payback."

Find the press release with the survey results here.

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