Redundancy…then what?
Almost a third (32%) of UK employers are planning to reduce headcount through redundancies or recruit fewer people in response to rising employment costs. According to the 2025 CIPD survey, it’s the highest level of planned redundancies seen in the last decade outside of the COVID-19 pandemic. For many leadership teams, restructuring is becoming a commercial reality rather than a choice which is why I believe it’s time we changed the conversation.
Redundancy isn’t a sign that a business has failed - in many cases, it’s exactly the right decision. A well-planned redundancy program can reduce costs, simplify decision-making, improve efficiency and help secure the long-term future of the wider organisation. I’ve been fortunate to support companies where difficult decisions have done exactly that.
The real question isn’t whether redundancy is right or wrong. It’s whether the organisation is using it as part of a longer-term strategy, or simply as the quickest way to solve today’s problem.
They Aren’t the Same Thing
One of the biggest misconceptions I come across time and time again when talking to clients is that organisation design, restructuring and redundancy are all the same things. They’re not.
Organisation design is about defining where the business needs to go. Restructuring is how you move the business from today’s organisation to tomorrows with an element of achieving that being a redundancy program. When those three things happen in the right order, change tends to be clearer, more purposeful and ultimately more successful.
The difficulty comes when redundancy becomes the starting point rather than the outcome.
Looking Beyond This Quarter
I completely understand the commercial pressures leaders face. Sometimes you need to reduce costs quickly, a key customer has been lost, investor expectations change or the market simply moves faster than the company can respond to.Those realities can’t be ignored.
However, while responding to today’s challenge, I always encourage leadership teams to ask one additional question:
“What does this business need to look like in two or even three years’ time?”
Because that’s often where the biggest opportunity lies, not just fixing the issue today. The most resilient organisations don't just reduce costs. Before removing roles they understand the work carries out todays what that needs to look like tomorrow. Too often companies reduce headcount before redesigning how work flows through the business. The result is predictable—responsibilities become blurred, decision making slows and the remaining teams inherit work that nobody has really planned for.
The Cost of Repeating the Same Change
The concern with redundancy doesn’t occur through a single program – often these are useful and add significant value. The red flag appears when multiple rounds of redundancies happen with the effect extending, whether consciously or not, far beyond the initial employee engagement of the effected cohort.
This happened with a client of mine. Specific sector and market sector volatility were the norm as was the need to consistently adapt. The ‘eb and flow’ of business performance had resulted in multiple rounds of redundancies (often in the same area) over the space of just 12 months.
The result, employee engagement had hit the floor, trust and confidence in the leadership team and direction had diminished and organsiational structures and designs had not evolved but had instead led to revisions that had, over time, caused silo’d working, inefficient processes and ways of working and managing performance and expectations had become confusing.
Every time a business restructures, it asks something of its people, but whilst focus often remains on the bottom line of a profit and loss account employee engagement drops and effect one of the widely regarding consequences – business performance and productivity.
By being laser focused on the end goals and having a redundancy programs that are ideally limited to one or two occasions combined with building a simple agile & future-proof business structural
foundation and not straying from that focus can be the absolutely game changer and moving a significant way to restoring trust, confidence and yes even productivity, customer experience and ultimately business performance.
Designing for Agility, Not Just Efficiency
The learning from my many years of seeing this happen…companies can’t always predict the future—but they can prepare for it. So, building future-proofed organisational designs that reduce the need for constant redundancies and not just simply cost:
Build flexibility (role paly scenarios)
Reduce unnecessary spans & layers
Broaden capability
Introducing or reinforce leadership competence expectations
Remove single points of failure and look at ways to increase flexibility in both skill and process.
Create roles and teams that can adapt to changing customer demands.
The Bar Has Been Raised
It would be wrong of me not to note though that alongside the commercial challenge, the legal landscape is becoming more complex.
The updated Employment Rights Act introduces significant changes affecting areas such as trade union recognition, unfair dismissal and dismissal and re-engagement to name but a few. For employers, that means redundancies and restructuring programs require even greater planning, expertise, communication and careful execution than before.
If you’re looking for practical guidance on the legal changes, I’d highly recommend following Nic Elliott, Head of Employment Law and HR Director at Actons Solicitors. His short videos do an excellent job of breaking down the ever-changing legislation into straightforward, practical advice.
A Better Question
Businesses will always need to change and may include restructuring or redundancies and that’s ok. In fact, when done well, they can be the catalyst for a stronger, healthier and more sustainable business.
The mistake is assuming the job is finished once the initial savings have been delivered. Because for me the best redundancy change program forms part of a clear aligned plan to progress.
So, the question to ask yourself is - if you’re currently planning to change your business, chances are people are at the heart of it. And if you don’t have a HR team with capacity or expertise or whether you even have a HR team at all – who’s helping you deliver the change you need for today and tomorrow?
Could this be an issue in your business?
Sometimes the hardest part is knowing what to look for before something becomes a bigger problem.
That’s why I created the CAPhr People Health Checks — practical self-assessments designed to help you take a step back, understand where you are today and spot the gaps, risks and opportunities that might need attention.
No lengthy consultancy exercise. No jargon. Just structured questions, practical guidance and clear next steps to help you work out what’s working, what isn’t and what to do about it.