After a reorganisation shrinks the job, does the incumbent keep their level?

The job gets the new level immediately; the person gets a personal level marker for a fixed period. We used 24 months at an Austrian energy company. During that time they are first in line for vacancies at their old level. After it, the personal marker goes, and pay protection continues according to the agreement.

Of 31 people, 20 moved back into a role at their previous level within the period.

I would think hard before removing a title after 24 months from someone who did nothing wrong. We kept the personal level indefinitely but froze it: no range increases above the lower level's maximum, and no eligibility for the next promotion until the job catches up. Less tidy, more humane, and the works council supported it.

Having done both versions at different employers, what I'd advise is close to the second reply, with one change. Level the job correctly on day one and record the difference as a personal placement, so the framework stays about jobs and your level 7 peers have an answer.

Set the review at 24 months, but make the outcome a decision instead of an automatic drop: at that point either the role has grown back, the person has moved, or you agree a permanent personal placement that closes when they leave the role. That gave us the discipline of a date without the cliff edge.