How Corporate Relocation & Restructuring Affects Employees

Instructor: Kat Kadian-Baumeyer

Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.

The consequences of corporate relocation or restructure, can mean stressful times ahead. The toll on an employee's psychological and financial well being can have lasting effects. We will explore several common issues that most employees experience.

Corporate Relocation and Restructure

Let's face it, as the economy changes, companies are sometimes forced to relocate or restructure in order to meet their financial objectives.

When a company restructures, it is changing the way they do things in response to environmental factors such as adverse economic trends, repositioning to place the company in a new light, or to create subdivisions that facilitate better management and even tax breaks.

For example, Time Inc. made the decision to restructure by consolidating several of its magazine holdings into one portfolio. This decision was made to streamline the company.

The fallout from Time Inc.'s choice was the layoff of some 500 people. Although it doesn't sound like much in a corporation the size of Time, it's toll left people out of work.

Corporate relocation weighs heavily on employees too. When a company moves to a different state or country, employees are faced with tough decisions. For some, it may be seen as a new adventure.

For others, it could mean giving up a home and extended family to move to an unknown place. Yet others may be forced to separate themselves from the company.

In 2014, Sony Pictures Imageworks announced their plan on moving their production facility from Los Angeles to Canada. Their rationale - tax breaks and exchange rates made Canada a much more attractive location. This left the fate of 270 employees in the balance.

Those whose fate was left in the hands of Sony executives had to make a decision. Stay in Los Angeles and seek other employment or chase their jobs to another country.

The Real Price of Restructure and Relocation

We often read that companies make decisions that will save them money, increase revenues and increase profits.

But who pays the real price? Most likely, employees will experience psychological and financial pain.

For the employees who are left in the dust, it is common to feel anger and helplessness. After all, the decision to restructure or relocate was outside of their control.

You see, for most of us, work provides much more than financial freedom. It makes us feel good about ourselves. We connect with co-workers on an emotional level and this creates long-lasting relationships. Then, with little to no warning - these relationships are severed leaving the ousted employee alone.

Relocation does affect employees and their families. When a company moves its offices to another city, employees are faced with tough decisions. Uprooting family is one major consideration. Leaving friends behind is another.

However, there is yet more to think about. Will the new location be affordable? Are there good schools in the new location? How will the new employee manage traveling between two cities if moving is not an option?

The decision to move away from what's comfortable to the unknown can bring on many emotional issues. Not being accepted into the new community is a common fear. So, finding new friends who share common interests may not be easy.

Financial instability is another problem. If the employee is selling a home, he may wind up carrying two mortgages during the transition making money tight. Factoring in the cost of relocation, it could mean having less resources available.

Relationship concerns are also on the forefront. If one spouse has a career, it may mean that the spouse will have to give up his or her livelihood. It may also mean losing a salary if the spouse cannot replace the job after the move.

In the end, a relocation or restructure represents change. For many, this means tension between family members, friends and even colleagues.

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