IO Reviewer Chapter 14
IO Reviewer Chapter 14
Effects of Downsizing
Victims
Research is clear that there are many negative
consequences to losing one’s job
Survivors
Those employees not laid off.
However, research indicates not only that
survivors suffer psychological trauma but that
their future productivity is related to the way in
which they and their notso-fortunate
counterparts are treated during the downsizing
process
Local Community
Local governments suffer as their tax base and
revenues are reduced, local charities such as
the United Way get fewer donations and often
have increased demands for their services,
retail stores lose business, banks have greater
numbers of loan defaults, crime rates increase,
and social problems Increase
The Organization
Though many organizations continue to
downsize, it is not clear that downsizing
produces the desired increases in organizational
effectiveness