Anyone who has taken a business management in college has heard of Abraham Maslow and his hiarchy of needs. 
Even though his paper, “A Theroy Of Human Motivation“, was written in 1943 it is still very relevant today. But it seems that in the midst of all the stress of downsizing and reorganization, too many managers have forgotten it’s principals.
While the lines of communication breakdown with more and more closed door meetings at the office; employees are left to imagine what is really happening. Are jobs in jeopardy? Who’s name is on the list? All of this additional stress causes a uncontrolled neurological shift in the brain. Employees revert to “Fight or Flight” mode. You can feel the hard drive spinning in your head as it searches for information on what to do. Creativity is beyond the reach of your brain during these times. All you can access are past experiences. Sound familiar?
To releave stress in the organization, management needs to be forthright and honest. If cuts are comming, announce the news with the assurance that the company will do all it can to help those laid off. Yes this may cost additional dollars, but you will help prevent sabatauge. Employees need to know that you care about them. This will go a long ways to easing conflicts and help prevent angry outbursts.
Once cuts have been made the remainder of the staff needs reassurance of their value to the company. All of these things will free up creativity in the organization.
Ken Cole
A Second Look Business Consulting
Honesty is such a simple concept to understand, yet so many managers and senior managers seem to fail to grasp it. You’re absolutely right about closed-door meetings creating a climate of fear and anxiety, and spot on about the potential consequences.