The Redistrubtion Reflex

Picture a company as a car.

The executives look at the fuel gauge during a downturn, panic a little, then decide the fastest way to save money is to remove parts from the engine, a few mechanics from the workshop, maybe one of the drivers as well. On paper the numbers improve immediately, operating costs go down, shareholders relax for a quarter or two, everyone congratulates themselves for being "decisive."

Then the car starts rattling.

I've been through four restructures personally. The first I remember clearly was at ANZ, where I was asked to reapply for my own job, then appointed to lead a team I had no technical background in, because senior leadership couldn't find anyone else willing to take it. My predecessor had asked out of that team, which should have told me something. The team was difficult, the dynamic was already broken, and I was being slotted in as part of a musical chairs reshuffle that had nothing to do with redesigning the function and everything to do with filling a gap quickly. Whether there was a hidden agenda behind it, I never confirmed. But the pattern was visible: the organisation had shuffled people instead of addressing the problem.

I spent the first few months just trying to understand what the team actually did. That's time I should have spent on strategy. The organisation had removed the symptom of a leadership problem by reshuffling people around it, and created a new problem in its place.

That's the version of restructuring nobody draws on the whiteboard.

I've watched the same pattern play out across banking, government, education, and technology for years. Different industries, same mechanics. The economic cycle turns, leadership feels immediate pressure, and redundancy becomes the lever because it is fast and measurable, politically safe to explain in a boardroom. Whether you like it or not, headcount is still the easiest number to attack when leaders run out of imagination.

The deeper problems usually remain untouched.

Processes still don't flow properly. Teams still duplicate effort. Systems still create friction. Leadership still avoids the uncomfortable conversations. So the organisation removes people because the organisation cannot yet remove the causes.

And then comes the rehire cycle.

That part always fascinates me, because people act surprised every single time.

Demand returns, projects restart, customer expectations rise again, remaining staff are exhausted, institutional knowledge has already walked out the door carrying a cardboard box and a farewell cake, and suddenly the same organisation is back in the market desperately trying to hire the capability it removed six months earlier. Except now salaries are higher, recruiters are involved, onboarding takes time, and morale inside the company is sitting somewhere near the basement carpark.

I saw this directly at ANZ. People made redundant came back as contractors, sometimes within months, because the institutional knowledge and the working relationships they carried were simply irreplaceable. The organisation paid to remove them, then paid again to bring them back, usually at a higher rate, often under less favourable terms. The same thing happened at Stats New Zealand. Staff left, observed the mandatory stand-down period, then returned in a different role with a slightly different title. The knowledge never actually left. It just temporarily stopped appearing on the payroll.

And so do people.

That's the part spreadsheets miss.

After redundancies, the survivors work differently. They become careful. Meetings get quieter. Innovation slows down because nobody wants to be the next cost-saving exercise. Good people start asking themselves whether loyalty still matters, especially in countries like New Zealand where the market is small, reputations travel fast, and everybody seems to know somebody who knows somebody.

I saw versions of this after Covid across New Zealand. Hospitality. Airlines. Retail. Healthcare. Technology. Some organisations cut deeply during uncertainty, which I understand because cashflow pressure is real. But many underestimated how hard it would be to rebuild capability once the cycle turned again. Air New Zealand was not unique. Neither were the tech companies in the US laying off thousands while quietly continuing to recruit specialist talent in parallel.

There's a third loop, and it's the sneakiest one. Sometimes the person doesn't return to the same team at all. They come back to a different business unit, doing essentially the same work under a different title, because that business unit decided the centralised function was too slow, too political, or too focused on what the organisation deems efficient rather than what the business actually needs. You could call it shadow IT. I've seen it in education: a staff member leaves the technology function, waits a while, then reappears in a business department doing work the technology team would have called their responsibility. The organisation hasn't fixed anything. It has just spread the cost in ways that are harder to track and harder to challenge, because now it's buried in a business unit budget with a different job title sitting on top of it.

Same capability. Different org chart line. The original saving has completely evaporated.

Meritocracy is lip-service more often than organisations want to admit.

I'll be honest: I have been in the 80% of organisations that acted without fully pausing. The moment of pausing was always there, somewhere in a senior leadership discussion, where someone would raise the question of whether there were alternatives. There were alternatives. But when executive pressure to reduce costs is immediate, the conversation about alternatives becomes theoretical very quickly. Someone makes a calculation about their own position, decides that recommending cuts is safer than defending complexity, and the organisation follows the path of least resistance.

That's a human action for self-preservation. The executive who demands the cut is usually insulated from the downstream consequences. The manager who carries out the restructure is not. So the manager recommends what's safe, and the system continues.

Understanding that doesn't make it right. It explains why the same pattern repeats even when people who've been through it before are sitting in the room.

There was one exception I lived through, and I had a direct part in it.

During one of ANZ's restructures, coinciding with the system merger between ANZ and National Bank, I was given the task of identifying which team members should be released. Long tenure, skills no longer needed after the merge, that kind of brief. My immediate response was to be transparent with the team. I told them directly what was happening, why it was happening, and what the decision process looked like. I asked for volunteers. Some team members were genuinely relieved, because the redundancy payout was something they'd been weighing anyway, or because they'd had enough. Others wanted to stay.

What I didn't do was manage the optics for the benefit of people above me.

The team I was leading was punching above its weight. When the final decisions came down, the team stayed intact. Leadership didn't want to touch it. I don't know if that was wisdom on their part or just pragmatism, but the outcome was the same: a transparent process, a team that knew where it stood, and a result that didn't require a rehire cycle twelve months later.

The lesson I drew from that was simple: a team that is visibly delivering something leadership depends on is harder to cut than one that is just doing its job quietly. That sounds obvious. Fewer teams act on it than you'd think.

I guess I did something right.

Russell Ackoff used to talk about optimisation destroying systems when people optimise one part without understanding the whole. I think about that often during restructures, because organisations behave exactly like that. Pull one lever aggressively and something else strains downstream. Sometimes immediately. Sometimes eighteen months later when nobody connects the dots anymore, because the person who ran the original restructure has already moved to the next posting.

The irony is that many organisations already know where the waste sits.

I've seen organisations spend millions restructuring while leaving broken approval chains untouched, allowing manual workarounds to continue, tolerating duplicated reporting lines, or keeping technology platforms nobody really wanted because removing them required political capital. Cutting people is often easier than confronting organisational habits.

Good organisations pause long enough to examine the whole system before reaching for redundancy. They review the business model honestly. They simplify the workflows, invest in capability where demand is shifting, and automate carefully, instead of blindly replacing people with software because some consultant drew three circles on a PowerPoint deck. They reduce friction before they reduce humans.

And when redundancies genuinely become unavoidable, they handle them with clarity and dignity, because people remember how organisations behave during difficult seasons.

Everything leaves a residue.

Peter Drucker once said that when the environment changes, you must revisit the theory of the business. Most organisations say they believe this. Fewer actually do it. Many continue operating on assumptions built for a different economic cycle, then act shocked when the old formulas stop producing results.

That's usually the real problem.

Not the people.

It's worked for me.