Syrian Telecom Restructuring… Focus on Downsizing as a Main HR Strategy… why…? and How…? Benefits and Effects… ------------------------------------------------------------------------------------------------Prepared by:
1- Essam Gayad 2- Majed Mourtada 3- Alaa AldIn Jajah
It is said that the only thing that is constant in this world is ‘change’. This particular maxim is clearly manifested in the ever-changing business organizations we have today.
Downsizing is an extremely a relevant issue to organizations today. The current tendency of organizations to restructure and ultimately to downsize has a major negative impact on the organizations themselves, on their surviving and terminated employees as well as on society as a whole. The current adverse economic climate has been persistent and longlasting. As a result, many organizations that were operating inefficiently have been forced to restructure in order to streamline their operations and achieve operating cost savings that would ensure their continued competitiveness. MBA6 -HRM
Downsizing the Syrian Telecom
Throughout this thesis, participants have exerted their utmost effort to analyze ‘Downsizing’ as one of the most critical issues which has and is still facing our organization – the Syrian Telecom Establishment (STE). STE is now being a public government-owned economic-nature company. It is still the sole monopolist which provides telecom services in Syria. However, as the telecom market in Syria is going to be open to perfect competition, a new law ref. 18 has been issued and STE is now undergoing a transformation process into a commercial competitive company.
MARKET AND STRATEGIES
STE has to restructure itself in order to improve its position in relation with customer care and service quality and diversity. STE has recently decided to rehabilitate its infrastructure and network in order to be able to provide value-added services other than mere voice service. STE board-of-directors have become very much concerned about continuous loss of profits because of inefficient productivity and surplus in employees number. So downsizing has become the main issue of everybody in the organization.
Why has STE decided to downsize? to lower overheads, to increase profitability by reducing costs, to increase decision making speed by reducing layer of management, to sharpen focus on core competencies of the firm by outsourcing peripheral activities, to improve valuation the image and shape of the organization for potential increase of the stock price in the future. to make the company more efficient compared with other competitors, as a major raison d’être.
Downsizing as a solution to solve the problem
What does downsizing strategy mean?
A downsizing strategy is usually aimed at to reduce the scale (size) and scope of a business in order to improve its financial performance.
A reduction of the workforce is one of several alternative ways to improve profitability or reduce costs.
Anticipated effects of downsizing on STE’s staff…
Mixed effects on firm performance: some short-term savings, but long-term profitability and valuation not affected. Firm’s reputation as a good employer suffers after several layoffs. Downsizing forces rethinking in the employment strategy. Lifelong employment policies not credible after downsizing. Employee motivation disrupted: increase in political behavior, anger, fear – which impacts negatively on the quality of service and customer care. Survivors experience more stress due to longer work hours with redesigned jobs, and increased uncertainty regarding future downsizing. Early retirement and voluntary reductions often results in too many...