Downsizing is when a company lets employees go as a cost-cutting measure. Perhaps revenue has fallen and the owner knows they just can’t afford all of the employees they have on staff. It is legal for them to terminate some of these positions as they try to redo their budget.
That being said, downsizing can be problematic when employees believe they’re being discriminated against. This is not to say that downsizing itself automatically means that a wrongful termination has occurred. But it could be a red flag for some employees.
Does it impact all workers equally?
One of the requirements for downsizing is that it is supposed to impact all workers in relatively the same fashion. If one group is going to be affected by it more than others, then it could be discrimination against that group.
This is why employers are sometimes asked to look at the percentages of employees who could lose their jobs. Say that 75% of the employees who are let go in the downsizing are women, while only 25% are men – but the business as a whole has a roughly 50-50 split. Is this an indication that the “downsizing” is really just a cover for gender-based worker discrimination and wrongful termination?
Or say that an employer claims it’s time to downsize, but then the workers who are let go are all of the most experienced. Is downsizing really a way for that employer to discriminate against older workers and replace them with younger employees who accept lower salaries?
Situations like this can certainly get complicated. Those involved need to be well aware of the legal options they have at their disposal.