In an era defined by rapid change and unexpected challenges, organizations face mounting pressure to adapt or risk obsolescence. Corporate restructuring has emerged as a crucial tool for companies seeking to regain momentum, streamline operations, and unlock new avenues for growth. By embracing disciplined approaches and strategic investments, businesses can navigate volatility with resilience and purpose.

The Rising Wave of Restructuring in 2026

Across industries, from automotive and healthcare to engineering and consumer goods, companies are responding to macroeconomic headwinds, technological disruption, and geopolitical uncertainties. A staggering 90% of firms with over 1,000 employees have initiated or completed significant restructuring projects in recent years, and 73% are either planning or executing new programs. While these figures underscore the prevalence of change, they also highlight the scope for improvement and innovation.

Market dynamics such as rising production costs, tariff fluctuations, and sector-specific distress—particularly in chemicals and industrials—continue to fuel restructuring activity. Despite heightened filings for Chapter 11 reorganizations in the US and the adoption of new frameworks like Germany’s StaRUG and the UK’s Restructuring Plan, companies must guard against the 50–70% failure rate that undermines long-term objectives.

Defining Success: Best Practices to Overcome Failure

Achieving lasting outcomes requires more than reactive cost cuts; it demands a holistic view of transformation that aligns every facet of the organization. Studies show success rates can surge from 32% to 88% when leaders implement multiple critical practices concurrently.

• align structure with strategic goals and reinforce vision across teams
• reskilling and redeployment over layoffs to preserve talent and institutional memory
• clear communication and strong leadership that fosters trust and engagement
• Partnering effectively with advisors and internal stakeholders
• liability management and private credit solutions to improve liquidity and flexibility

These elements work in concert to build organizational momentum, reduce disruption, and maintain morale. By avoiding overreliance on headcount reductions, companies can retain critical expertise and champion a culture of continuous improvement.

Financial and Strategic Considerations

Restructuring is not merely an exercise in retrenchment; it is a strategic investment akin to mergers and acquisitions. When executed thoughtfully, it preserves valuable capabilities and sets the stage for sustainable expansion. Research indicates that declines in net leverage greater than 12% year-over-year are associated with positive GDP growth in the subsequent twelve months, underscoring the broader economic benefits of well-timed interventions.

Investors and credit committees increasingly recognize the upside potential of transformation programs, viewing them as vehicles for unlocking latent value, streamlining portfolios, and enhancing overall performance.

Alternatives to Layoffs and Preservation of Talent

In today’s competitive talent landscape, layoffs should be a measure of last resort. Progressive organizations are adopting creative solutions that preserve human capital and stimulate innovation. For example, Santander UK successfully preserved over 30% of its workforce by redeploying staff into new roles, while Korean shipbuilders allocated over W10.3 trillion to turnaround initiatives that supported both employment and sectoral competitiveness.

• Reskilling programs targeting emerging digital and technical skills
• Liability management exercises to optimize balance sheets
• Divestment strategies that refocus core operations
• Secured financing solutions for targeted investments

By prioritizing workforce transformation over headcount erosion, companies can maintain continuity, accelerate adoption of new processes, and strengthen employee loyalty.

Regional Trends and Future Outlook

Restructuring landscapes vary markedly by region. In the US, Chapter 11 remains the dominant pathway, with industrials and trading firms adapting more frequently to tariff impacts. Europe has embraced out-of-court frameworks, empowering stakeholders to collaborate under schemes like the Dutch WHOA, while Asia-Pacific sees divergent performance—China and South Korea expand, even as Japan and India experience slower activity.

Looking ahead to 2026, be prepared for:

• Continued rise in both formal and informal restructuring mechanisms
• Heightened debtor-creditor negotiations amid growing unrated debt
• A preference for divestments and liability management exercises over pure M&A
• short-term challenges with medium-term gains emerging as companies refine their approaches

These trends point to a maturing market for transformation, where agility and foresight trump reactionary measures.

Forging a Path Forward

Corporate restructuring is as much an art as a science. It demands a clear vision, rigorous planning, and empathetic execution. Leaders who embrace operational, financial, and strategic transformations with compassion and resolve can turn disruption into opportunity, redefining their organizations for a new era of growth.

As you embark on or refine your transformation journey, remember that success hinges on holistic planning, stakeholder alignment, and unwavering leadership. By adopting proven practices, leveraging innovative funding solutions, and investing in your people, you can create a resilient organization capable of thriving amidst uncertainty. The path to transformation may be challenging, but with the right mindset and tools, it leads to a stronger, more competitive future.