Engineering restructuring
The team is 40 people doing the work of 15.
Engineering team restructuring means bringing an over-hired engineering organisation back to the size and shape the business needs: a target shape decided from delivery data, the people who stay chosen on criteria written down in advance, the exits run under Belgian or Dutch law, and a team on the other side that still ships. You know a cut is coming. The question is whether it is run as a headcount spreadsheet by finance, or as an engineering decision by someone who can read the delivery data and the people.
I run restructurings as an interim or fractional CTO in Belgium and the Netherlands, in Dutch and English. This page covers who it is for and who should not do it, the situations that lead to it, how it runs week by week, what it costs, how it differs from a plain layoff, and what it looked like when it worked. In Dutch the work is usually called herstructureren or a reorganisatie; I call it right-sizing, because the point is the shape, not the cut.
Who this is for
- Scale-ups with 15 to 120 engineers that hired for a growth plan that did not land, and now carry a team sized for revenue they do not have.
- Owner-led SMEs whose software team grew one hire at a time without a shape, and costs more every year without shipping more.
- Founders and CEOs whose board has asked for a burn plan in which engineering is the biggest line.
- Companies merging two engineering organisations after an acquisition.
Who should not do this
Cutting is a tool. Not the tool. These are the cases where I say so on the first call.
- You are pre-revenue and slow. Cutting people will make it worse. The problem is focus, and fewer people do not create focus.
- The team is the right size and unfocused. 7 teams with no clear scope do not need to become 4 teams with no clear scope.
- You want a flat percentage across every team, decided before anyone has looked. That is a spreadsheet, and it cuts the people you most need to keep.
- You want it done quietly, by next Friday, without the works council. Belgian and Dutch law do not allow it, and the attempt costs more than the procedure.
- You want someone else to deliver the news to people you picked and will not talk to. I make that call with you, on evidence, or not at all.
The situations that lead to the call
- Headcount grew faster than the business. Revenue up 20 percent, the engineering team up 180 percent. Payroll is the burn plan.
- The board asked twice and got a hiring freeze both times. A freeze keeps the team you have, including the parts that no longer fit.
- The round fell short. A bridge or a down round closed, or runway dropped under 12 months.
- Delivery got slower as the team got bigger. Releases slipped from every two weeks to every quarter, while the number of meetings doubled.
- The first round of cuts already happened. Finance ran it, nobody changed the structure, and a second round is coming. The second round is where you lose the people you meant to keep.
Is your IT team too big lists the signals, and when to right-size and when not to covers the cases where cutting is the wrong answer.
How a restructuring runs
The law sets the order more than the plan does. The schedule below is a Belgian collective dismissal; a Dutch one has a different middle, described under the table.
| When | What happens |
|---|---|
| Weeks 1 to 3 | The fixed-price diagnosis. 6 months of pull requests, incidents and releases, read next to what the roadmap actually needs. Every engineer interviewed. The result is not a percentage. It is a target shape: which teams exist afterwards, who leads them, and how many people that takes. |
| Weeks 3 to 5 | The selection criteria written down before anyone looks at names. The legal sequence on a calendar with your employment lawyer. Fewer than 3 people outside the room know, and it stays that way. |
| Weeks 5 to 12 | If the numbers trigger the Renault procedure: information and consultation with the works council, written answers to every counter-proposal, then the 30-day waiting period. Nobody is given notice in phase one. I sit in those meetings and answer the engineering questions. |
| The exit week | Every person leaving is told in person, by their manager or by me, the same day. Those who stay hear the reasoning to their faces the same afternoon. The new team structure goes live the following Monday. |
| Months 3 to 5 | The roadmap cut to what the new team ships. One planning cadence, a named lead per team, releases on a date. This is where the cadence comes back, or doesn't. |
| Handover | A permanent engineering leader in place, promoted or hired. I stay 6 weeks past their start date, then leave. |
Below the collective dismissal threshold, individual dismissals done properly are faster and less corrosive, often 6 weeks end to end. In the Netherlands, the works council gives formal advice, the WMCO and UWV route applies from 20 dismissals, and the reflection principle decides much of who leaves, so a levelling framework has to exist before the restructuring, not during it. Realistically 3 to 5 months from first conversation to a smaller org.
What it costs
Day rates in the normal Western European band of EUR 1 000 to EUR 1 600, invoiced monthly. The diagnosis is EUR 9 500, fixed. No equity, no success fee, and no fee tied to the number of people who leave: an incentive like that would be a reason not to hire me.
Severance, the social plan and outplacement are a separate budget and usually the larger number. In the case below, severance and the engagement together came to roughly 40 percent of one year of the payroll saving. The money is rarely the hard part. The hard part is doing it once, cleanly, instead of in three demoralising rounds.
What it looked like in practice
- 45 engineers to 22. Series B SaaS, releases slipping. Read the delivery data, cut to the shape the roadmap needed, under the Belgian collective dismissal rules. Weekly releases again after 4 months, payroll from EUR 4 000 000 to EUR 2 000 000, one regretted departure in the six months after.
- Cloud bill down 42 percent. A reminder that not every cost problem is a people problem: from EUR 74 000 to EUR 43 000 a month in 5 months, no layoffs, no re-platforming.
- The portal shipped in 11 weeks. Owner-led SME, where the restructuring was of a supplier contract rather than a team. EUR 180 000 a year off the agency bill.
- A founding CTO replaced, nobody lost. Series A, 28 engineers, where the shape was fixed by changing the leadership, not the headcount.
The diagnosis decides whether your version of this is 20 exits, 4, or none at all.
Restructuring versus layoffs
| Restructuring | Across-the-board layoff | Hiring freeze | |
|---|---|---|---|
| Starts from | A target shape: teams, leads, scope | A percentage of payroll | The team you already have |
| Who leaves | Decided on written criteria and delivery evidence | Whoever the spreadsheet lands on, often the recent senior hires | Whoever resigns, usually the best |
| Structure afterwards | Fewer teams, each with a named lead | The same structure with holes in it | Unchanged |
| Delivery afterwards | Back within a quarter if done once | Slower, then a second round | Slowly worse |
| Rounds | One | Usually two or three | Continuous attrition |
How the exits run
Under the law of the country, planned before anything is announced. Belgium does not impose a selection method, which lets you keep people on merit if the criteria were written before the names. The Netherlands largely decides for you through the reflection principle. In both, the people who stay watch how the people who leave are treated. That is where the org is kept or lost.
Put a number on it first: the engineering cost calculator
Frequently asked
What is engineering team restructuring?
It is bringing an over-hired engineering organisation back to the size and shape the business needs. That means a target shape decided from delivery data, the people who stay chosen on written criteria, the exits run under Belgian or Dutch law, and a team that still ships afterwards. It is not a headcount spreadsheet run by finance.
How is an engineering team restructuring cut decided?
Six months of pull requests, incidents, and releases, read next to what the roadmap actually needs. The result is not a percentage. It is a target shape: which teams exist afterwards, who leads them, and who ships.
How do the exits run in an engineering restructuring in Belgium or the Netherlands?
Under the law of the country, planned before anything is announced. In Belgium that can mean the Renault procedure; in the Netherlands the WMCO and the UWV route. The people who stay watch how the people who leave are treated. That is where the org is kept or lost.
How long does an engineering restructuring take?
Usually 2 to 4 months from the first works council meeting to the day people leave in Belgium, and 3 to 5 months in the Netherlands. Add the 3-week diagnosis before it. Below the collective dismissal threshold, individual dismissals can be done in about 6 weeks.
How do you right-size an engineering team without losing the best people?
Write the selection criteria before you look at names, and base them on delivery evidence. Decide the shape before the people, keep the circle that knows small, and do it in one round. The people you most want to keep leave during the second round, not the first.
What does an engineering restructuring cost?
The engagement runs on day rates in the normal Western European band of EUR 1 000 to EUR 1 600, after a diagnosis that is EUR 9 500, fixed. Severance and any social plan are a separate budget and usually larger. In the 45-to-22 case the two together came to roughly 40 percent of one year of the payroll saving.
Related
- Right-sizing among the four problems I take on, on the homepage.
- The diagnosis: what the 3 weeks cover and what you get at the end.
- Interim CTO, if the restructuring also needs someone to hold the seat.
- When to right-size your engineering team, and when not to.