Downsizing without downgrading: learning how firms manage their survivors

Provides a literature synthesis on the impact of downsizing on the survivors and examines the experiences of three large Canadian companies. Results confirm trends that are generally reported in the literature regarding the negative aspects of downsizing. It suggests that where the company had a clear strategy to implement the downsizing, which included scheduling and a well‐specified operational plan, the impact on those dismissed as well as the survivors was buffered. The use of a downsizing plan also mitigated the negative responses on behalf of the remaining personnel. On the other hand, when the company adopts a reactive approach towards the downsizing process, numerous problems associated with the survivors are reported. The firm that applied seniority to layoff decisions received more favorable responses than firms that used criteria other than seniority.