What would you do if you get the directions from your upper management to reduce your team by firing some of them?

Very good question sir..

It is always difficult to layoff someone, because it not only impacts the person leaving as well as makes the other team members demotivated and work with fear. I have a forced ranking list of my team members updated periodically (based on potential, skills, role on the project, current performance). At first, I would ask the management whether is there a possibility to transition whatever % of people to other areas or on to other projects. I will try my best to fit these people into some other things.  If there is no choice but to fire, I have no option but to give the names that fall in bottom of the list of forced rankings..Then, I will try my best to motivate the remaining team members not to get impacted by this layoff, and remove fears..

Let me share you a personal experience. We were working on a product development team with25 team members for couple of years. Somehow due to competition, and sales/marketing strategies we couldnt get decent adoption of this product as expected. As a result, senior management decided to reduce the investment in this product, and asked us to reduce the team size by50%. So, we analyzed the team members strengths, skills and looked for options. We could successfully transition them into different web application products. Part of the reason for this successful transition was to make people ready for such changes.. I was sensing something like this could happen, and was motivating the team members to learn new technologies (HTML5) and was organizing internal trainings to grow the skills of team members.. When we were asked to reduce the team size in the current project, it was easy to reallocate these people on the new projects that company started to upgrade UI of existing products with HTML5 to make our products platform independant. So, our team was the only one which learnt it first, could successfully transition into those projects. Had our team not learnt this, we had to ask atleast some people to leave.

Due to the changes in market positions, and emerging technologies one skill or technology is not sufficient. People need to diversify themselves to remain competitive in the market. So, it is important for managers/leaders to motivate the team members to have diversified skills and mentally prepare them for changes (my opinion is based on IT jobs..).. May be my reply is not fully relevant to the question asked, but I hope it is someway related to the topic of "Firing employees"..

If you are asked to do it, then you must have the information why! Upper managment decides, but good upper management informs you well, so I only fire people when I am informed why. If you have the responsibility to fire people , then you have to be informed.

And its never a nice job.....but somebody has to do it.

Restructring is very commen in present business world. Of-course, if your company is under a financial burden due to poor business achievements, then you have to reduce the cost to survive. Therefore you have adhear to top managements instruction, unless otherwise you convice them not to reduce the staff which may give more negative impact to the current running business structure.

Since last few years such situations have become very common for reasons well known to everyone. When cost economics becomes the deterrent then it's unavoidable and one has to look for the best available options. Under such circumstances I would refrain from using the word "firing" as reducing of the resources is not due to their inabilities but for other reasons.