Downsizing and Social Cohesion: The Case of Downsizing Survivors

Abstract

Organizational downsizing was a pervasive feature of the U.S. economy during the 1980s and 1990s. A long-standing public health literature recognizes that unemployment and job loss may adversely affect health, but there has been little attention to date on the impact of downsizing upon those who survive job cuts and continue to work in downsized firms. Drawing on research with survivors of downsizing carried out by the U.S. Department of Energy, this article identifies a variety of social and psychological consequences of downsizing that fundamentally destabilize the work environment and work experience for remaining employees. Evidence from this research suggests that the work climate of the post-downsizing environment is laden with suspicion and conflict, and that survivors show feelings of demoralization, sadness, anxiety, and disorientation. A critical factor influencing these responses, we argue, is not downsizing—which is the exposure faced by those who lose their jobs—but the loss of social cohesion that downsizing ultimately represents to survivors. We conclude that addressing the trauma of downsizing for survivors will require providing employees with more genuine opportunities to participate in workplace governance.