How to Successfully Navigate Corporate Restructuring?

Key takeaways

• Most restructuring efforts fail, leaving companies with lower productivity, weakened market position, and disengaged employees.
• Retraining and moving employees to new roles within the company costs less and preserves valuable knowledge compared to layoffs.
• Clear alignment with business strategy, honest communication, and support for all employees are essential for successful corporate restructuring.
• Companies using multiple best practices in restructuring raise their success rate from 32% to 88%.

Most large companies restructure frequently, but fewer than half succeed. Leaders must approach restructuring with the same rigor they would apply to major investments or acquisitions. This outline provides insights for CEOs on corporate restructuring strategies and executing workforce changes effectively to achieve desired business outcomes.

Strategic alternatives: Reshaping the workforce beyond layoffs

While layoffs might seem like the fastest cost-cutting measure, they often backfire through loss of institutional knowledge, damaged morale, and eventual rehiring costs. Forward-thinking leaders instead employ strategic approaches that retain valuable talent while aligning workforce capabilities with future business needs.

Redeployment over redundancy

The financial case for keeping employees is strong. Making one worker redundant in the UK can cost over £16,000 in severance and related expenses, not counting the cost to rehire when business rebounds. This reality is pushing more organizations toward “retain and retrain” approaches as effective corporate restructuring strategies.

Santander UK demonstrates this strategy in action. During restructuring, the banking giant successfully moved 30% of affected employees into new roles rather than letting them go. Staff from shrinking head-office units were retrained and moved to customer-facing positions in growing retail banking segments.

Reskilling as a core strategy

“When you have workers that already possess much of what you need, it makes a lot more sense to retrain them than to go out and hire new workers.”

– Dr. Anthony Carnevale, Director of Georgetown University’s Center on Education and the Workforce – 

This strategy aligns with global workforce trends. McKinsey projects that by 2030, up to 375 million workers (14% of the global workforce) may need to switch occupations or acquire new skills due to digitization and automation. Companies that proactively address these skill shifts through internal development gain strategic advantage in their corporate restructuring techniques.

Embracing internal mobility and “quiet hiring”

Forward-thinking organizations are increasingly turning to “quiet hiring”—filling talent needs by reallocating and developing internal employees rather than making external hires. This approach leverages existing employees’ deep knowledge of company operations and culture, shortening the learning curve for new roles.

“Businesses can overcome obstacles by returning to the internal workforce and putting them at the center of talent strategies.”

– CEO of HR Consulting firm –

Employees generally respond positively to these opportunities. However, implementation requires careful planning. A Monster’s poll warned that 27% of employees would consider leaving if they felt “quiet hiring” just meant extra duties without proper support.

Internal mobility programs deliver a triple benefit: they fill critical skill gaps cost-effectively, boost employee engagement by providing growth opportunities, and preserve valuable institutional knowledge that would otherwise walk out the door during layoffs.

Best practices for leading successful restructuring

Executing restructuring successfully requires a deliberate approach that balances strategic business needs with human considerations. The difference between success and failure lies not in whether you restructure or which types of business restructuring, but in how you implement these five critical practices that top-performing organizations consistently apply.

Start with strategy and clear planning

Successful restructuring begins with strategic alignment—structure must follow strategy, not the other way around. This principle is supported by Boston Consulting Group’s finding that companies which synchronized their organizational design with strategic objectives had far higher success rates in restructuring.

The impact of proper planning is dramatic. According to BCG data, having multiple success factors in place (strategic alignment, clear roles, strong leaders) raises the chance of a successful reorganization from only 32% to as high as 88%—a compelling case for thorough preparation.

Three essential questions to guide your restructuring planning:

1. How does this change directly support our business strategy?
2. Which roles and skills will be critical to our future success?
3. What specific metrics will we use to measure restructuring success?

Leaders should define the specific purpose of restructuring (entering a new market, digitalizing operations, cutting costs) and identify which roles, skills, and departments will be key to that vision. This strategic clarity should guide decisions on where to cut versus where to invest in your corporate restructuring strategies for successful transformation.

Communicate transparently and build trust

Open communication is consistently cited as the number one action to take before and during restructuring. Being transparent with employees about the reasons for change, the criteria for decisions, and the expected outcomes is essential for maintaining trust.

According to Gallup, employees who trust their leaders are 4.5 times more likely to be engaged and 62% less likely to feel burned out during major changes. Even when delivering difficult news, honesty builds respect and resilience.

Effective communication during restructuring should include:

• Clear explanation of business reasons driving the change
• Transparent timeline and process of corporate restructuring details
• Specific criteria used for decision-making
• Regular updates as implementation progresses
• Multiple channels for employee questions and feedback

Re-evaluate roles and prioritize skills

Rather than viewing restructuring as simply a headcount reduction, leaders should use it as an opportunity to rethink how work gets done. Talentnet recommends re-evaluating each department’s structure and workload to identify redundancies and inefficiencies while spotting understaffed critical functions.

A best practice is conducting a “skills inventory” that maps employees’ current capabilities against those needed in the new organizational design. E.g Santander’s use of a “release/demand matrix” exemplifies this approach, helping match employees from shrinking units to vacancies in growing units based on skill transferability.

Every position in the new structure should have a clear purpose and value aligned with strategic objectives. If certain positions no longer support the strategy, those are candidates for elimination or redefinition. This methodical approach is one of the most effective methods of corporate restructuring for long-term success.

Support all affected employees humanely

How a company treats employees during restructuring speaks volumes about its values and leadership. For those whose roles are eliminated, best practice includes offering severance packages above the legal minimum, extended benefits coverage, and outplacement services to help them find new jobs.

Professional career transition programs can provide valuable support through resume updates, interview practice, and connections to hiring networks. This approach not only helps departing employees but also preserves the morale of those who remain.

For employees taking on new roles through internal transfers or “quiet hiring,” proper orientation and training are equally vital. Never assume people can seamlessly absorb new responsibilities without support. Leaders should acknowledge both the contributions of those leaving and the challenges facing those in new positions.

De-risk execution and monitor progress

Even well-planned restructuring can falter without careful execution. Experts recommend establishing a transition team with representatives from HR, legal, communications, and major business units to oversee implementation.

BCG research suggests breaking restructuring into manageable phases and testing changes in one unit before company-wide rollout when feasible. Contingency planning is also essential—leaders should prepare for scenarios like key talent departures or temporary productivity dips.

Post-implementation monitoring checklist:

• Track financial metrics against restructuring goals (cost savings, efficiency gains)
• Measure operational KPIs relevant to the specific goals of the restructuring
• Conduct pulse surveys to assess employee engagement and adaptation
• Monitor voluntary turnover rates, especially among high performers
• Schedule formal review checkpoints at 30, 90, and 180 days

Post-implementation monitoring is vital for success. Set clear metrics to track outcomes against goals, whether cost savings, improved speed, or enhanced innovation. Use employee surveys to identify lingering issues, and be prepared to make adjustments when needed. The goal isn’t just to change the org chart but to realize tangible benefits from your corporate restructuring techniques.

Workforce restructuring represents more than a cost-cutting exercise—it’s a strategic imperative for future-proofing your business. Leading with empathy while providing robust support is non-negotiable for maintaining trust and performance. The cost of poorly managed change—in lost productivity, disengagement, and weakened competitiveness—far outweighs the investment needed to restructure thoughtfully and effectively.