Downsizing is dead; long live the downsizing phenomenon: Conceptualizing the phases of cost-cutting

Abstract

AbstractDownsizing as a systematic reduction of employees is frequently utilized in order to increase productivity, efficiency, profitability, and competitiveness of organizations. As a strategy of choice for many firms around the world, downsizing produces far-reaching financial, organizational, and social consequences. Despite the large body of literature, there is inconclusive evidence as to whether downsizing is effective and whether it generates the widely anticipated benefits. Employee downsizing as a change management strategy has been actively adopted for more than three decades. This downsizing article presents a phase typology of job cutting including three distinct phases and three levels of argument. As a conceptual paper, it aims to examine, update, and extend Littler and Gandolfi's (2008) seminal work. The research paper culminates with a discussion of current downsizing practices, and posits that the downsizing phenomenon has remained a popular restructuring.