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SECTION 1: PROBLEM IDENTIFICATION AND ANALYSIS We will take AT &T as an example. “ In 1992, AT &T downsized to remain competitive in the global market. They released 18,000 human operators and replaced them with automated machines.”2 The performance problem by human resource management is simply poor planning. Management did not realize the potential problems that lay ahead for the company as a whole. If downsizing is not effectively planned, managed or implemented it can cause a number of consequences. The consequences up for discussion are: 1. Downsizing causes resentment and resistance in surviving employees 2. Downsizing if not handled carefully will cause financial set backs HR management must handle employees, both survivors and former, with kid gloves. Downsizing means more than passing out pink slips. Steps must be taken to ensure that the remaining staff feels comfortable so that performance levels do not drop. It is also important to keep the loyalty of former employees simply because they now have become potential customers. Remaining employees may show signs of inadequacy. They are faced with new responsibilities and positions. They may feel as though they are next to be fired if they do not perf