For a company to thrive, it must be profitable and competitive. But what can be done when objectives are not being met or when internal dialogue is blocked? A strong choice may be necessary, such as restructuring the organization.

A company may be restructured for a variety of reasons. However, certain cases of restructuring are provided for in the Labour Code or recognized by case law:

• A decline in production resources;
• A health crisis;
• The departure of a manager ;
• Relocation of certain activities (or the company);
• Price collapse;
• A strategic reorientation;
• Loss of profitability;
• Tensions in human resources management.

Unlike reorganization, restructuring involves redefining the company’s economic and legal framework, with major impacts on :

• Means of production: relocation of an activity, decrease or increase in production;
• Financial structure: changes in share capital, new shareholders ;
• Payroll: job cuts as part of restructuring involving mass redundancies.
• Legal situation: sale of business, creation or closure of sites or subsidiaries, merger. In this case, the manager is obliged to apply the principle of continuity of the contractual relationship. In other words, the employment contracts of the old company are transferred to the new one.

Restructuring may entail layoffs in order to preserve the company’s competitiveness. In this case, we’re talking about redundancies. The latter are only possible if the employer is unable to reclassify the employees concerned, or if he or she refuses to modify the basic conditions of the employment contract. Where several employees are concerned, the company is obliged to define the order of redundancies in a collective agreement.

For a corporate restructuring to be effective, it is crucial to follow all these steps correctly.

Awakening

The first step is awareness. The aim is to identify and understand the company’s need for change, by observing the imbalance between the structure and its environment. Once the problem has been identified, it’s time to organize an audit of the company and all its departments. To make this transition a success, you need to be objective in the conclusions you draw from the audit.

The advert

The decisions have been made, the action plan defined, and now it’s time to announce it. Your employees may be surprised, react violently or resist. That’s why it’s crucial to adopt a clear communication approach, which also concerns external stakeholders (customers, suppliers, partners, etc.) You need to reassure everyone about the benefits of restructuring.

The disintegration

Disintegration is the moment when the organization destroys itself to make way for a new form of organization. The whole structure is in a state of upheaval, and the decisions taken when drawing up the action plan are designed to cause as little stress as possible. Disintegration is complete when there is no longer any reference to the old organization.

Reconstruction

Employees learn to settle into their new environment. Quite often, this involves discovering new positions with new missions, and sometimes redundancies. Internally, this translates into support or rejection. Some adjustments may still be necessary at this stage of the process.

Integration

The company’s new roots are consolidated, and the actions defined in the first stage are confirmed. More than ever, management is looking to the future and the initial results of this restructuring.

Elected members of the CSE

During corporate restructuring, the elected members of the CSE play a major role in shaping the company’s strategy. The purpose of these interviews is to analyze in detail the motivations and methods proposed by the employer. These elected representatives are also present throughout the company’s transformation, in particular to support the employees concerned.

Trade unions

Union organizations take action at the time of company restructuring to :

• Defend individual or collective professional interests;
• Defending agreements and collective bargaining ;
• Guarantee compliance with certain conditions of the restructuring plan;
• Consider the impact on employee health.

Transition Management Firms

To ensure the success of a corporate restructuring strategy, it may be advisable to call on interim management services. The interim manager may be an asset