Downsizing and the impact of job counseling and retraining on effective employee responses

Purpose – Downsizing is a very pervasive organizational process. At these critical junctures many organizations do little to prepare their employees for a mass layoff. The main purpose of this study is to examine how the incorporation of job counseling and professional retraining programs during a period of downsizing affected the responses of both the employees who were dismissed and those who remained in the organization. Design/methodology/approach – The study was conducted in a large metalwork factory in Isreal that underwent significant downsizing as a result of a major crisis. Interview data were collected from a sample comprising employees selected randomly from a list which the human resource department prepared. The analysis is based on a data set that included 229 employees. Findings – Results indicate that that guidance and training programs have a two‐fold effect: first, dismissed employees who participated in these training programs had a more positive reaction to their dismissal than dismissed employees who did not participate in such training. Second, employability factors as well as personal and demographic attributes do not affect the participants' responses. Originality/value – It is suggested that an appropriate downsizing process could produce effective responses on the part of the dismissed workers. Preparing individuals through participation in appropriate programs significantly promotes employee morale and reduces negative affective responses through consideration of the individual cost caused by the downsizing process. With appropriate downsizing plans, survivors' emotional reactions will not necessarily comprise only negative emotions but they may, under certain circumstances, also experience some positive emotions.