Learning from the Past – Downsizing Lessons for Managers


Journal of Management Research

ISSN: 0972-5814 Online ISSN: 0974-455X

Learning from the Past – Downsizing Lessons for Managers


Franco Gandolfi


Abstract

Downsizing as a change management strategy has been adopted by companies and governmental agencies since the 1970s. While workforce reductions were utilized mainly in response to organizational and economic crises prior to the mid-1980s, downsizing developed into a proactive restructuring strategy of choice for a multitude of organizations in the mid- to late-1980s. Since then, downsizing has transformed the corporate landscape and changed the lives of hundreds of millions of individuals around the world. While downsizing has attracted a lot of attention in academic circles, the business community, and the popular media, many misconceptions and mysteries surrounding the phenomenon have remained. This research study presents an overview of the reported financial, organizational, and human consequences following the conduct of downsizing. More importantly, the paper draws out implications for practicing managers and showcases four downsizing lessons that need to be considered by executives contemplating the adoption of downsizing.


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