The thing that people need to remember is that downsizing may be back on the front pages, but

the downsizing never slowed down. Downsizing has been a constant and regular feature of the
new working world, and it will continue to be.
Bruce Tulgan, founder and CEO of RainmakerThinking

Why downsizing?

Global competitive pressure demaded to critclally evaluate its cost structure

Due to recession (Krugman, 2009)

The oil shocks of the 1970s, along with the

increased global (notably, Japanese) competition, forced many U.S. firms to reassess their
cost structures, restructure their operations, and explore ways of reducing costs to regain
competitiveness (Baumol, Blinder, & Wolff, 2003

employee downsizing
as follows:
Employee downsizing is a planned set of organiza-
tional policies and practices aimed at workforce reduction with the goal of improving firm
performance
Cameron, 1994; Cameron, Freeman, & Mishra, 1993; Cascio, 1993;
DeWitt, 1998; Freeman & Cameron, 1993; Kozlowski, Chao, Smith, & Hedlund, 1993)

Downsizing Work outcome

Downsizing
Performance

. For example, Guthrie and Datta (2008) argued that industry conditions will
moderate the impact of downsizing on firm performance because of differential effects on
employees social capital, psychological contract perceptions, and so on, but did not mea-
sure these employee-level outcomes. Similarly, Chadwick et al. (2004) argue that HR
practices (e.g., advance notice, extensive communication) used by downsizing firms can
affect firm performance through their effects on employees commitment levels and orga-
nizational citizenship behavior but do not measure these latter individual-level constructs.
Downsizing studies at the individual level find that certain HR practices (e.g., severance pay,
insurance coverage) increase perceptions of organizational trust and support but do not
examine the implications of these employee outcomes on organizational functioning and
performance. Future studies of downsizing that combine both individual- and organizational-
level outcomes would provide a much richer and nuanced understanding of downsizing
effects. Such studies might usefully employ hierarchical linear modeling to accommodate
multilevel measures and designs.
Anger
Stop telling us to work smarter. Show us how. . . . Stop blaming us! We've
been loyal to the company. We've worked hard, and did everything we were
told. We've moved for the company; we've traveled for the company; and
we've taken on extra work for the company. And now you say we did wrong.
24
O'Neill and Lenn
The object oi the
anger is not
downsizing per se, but
rather the attempt to
glorify the process.
You told us to do it. Management told us to do it! And the company did pretty
well while we did it. Stop blaming us! . . .

Voices of survivors: Words that

downsizing CEOs should hear
Hugh M. O'Neill and D. Jeffrey Lenn

We wait, and wait, and wait. . .

I think we've spent so much time cutting that we've not done enough
building. We talk about quality, but we haven't done a good job
understanding the customer. . . I don't understand why some business and
lines have been cut and others kept. I'm pretty sure that we've cut the field
offices more than we've cut the headquarters; we've cut the line more than
we've cut staff. The cuts don't always seem to make strategic sense, and that
worries me. There may be things going on that I'm not aware of, but still, if I
don't know what's going on I can't get committed to the strategy. . . .

JOB SATISFACTION, ORGANIZATIONAL COMMITMENT,

AND WITHDRAWAL COGNITIONS
Job satisfaction, organizational commitment, and turnover intentions are three
of the most frequently studied constructs in organizational psychology. Job
satisfaction and organizational commitment have been viewed as antecedents to
work outcomes such as absenteeism, turnover intentions, and turnover; as consequences
of the earlier reviewed individual and work environment characteristics;
and as correlates of each other. While the relation between organizational
commitment and actual turnover behaviors often has been moderate at best,
turnover intentions or related withdrawal cognitions are viewed as closely linked
to the work environment characteristics and to affective responses to the job
(satisfaction and commitment), and have a more immediate effect on withdrawal
behavior.

Annual Review, 19931997: Work Attitudes and Outcomes

Suzanne H. Lease
The University of Memphis\
the social exchange theory. According to this theory the relationship between the organization and its
employees are some of the factors which contribute towards organizational commitment .Organizations
try to have a balance of all these elements. Any lacking in one or more of these elements will cause
employees to leave that organization.

Relationship employee commitment employee downsizing