Workforce Reductions in Theory and Practice: The Swedish Tobacco Monopoly in the 1920s

The aim of this paper is to clarify and discuss the various ways firms can make workforce reductions. This aim is accomplished by an in-depth study of an historical case; the downsizing process undertaken in the 1920s by the Swedish Tobacco Monopoly, a state-owned company that had to balance between rational business conduct and social responsibility. The paper makes use of qualitative sources, such as board minutes and memos, and a database covering all blue-collar workers in one of the company’s factories. The paper adresses conceptual questions concerning how to theoretically and empirically distinguish between various reduction strategies and tactics. Its main contribution is to move beyond the simple characterization of reductions as being either smooth or harsh and instead emphasize the multitude of management choices involved in reducing headcount and, consequently, the diversity of downsizing processes.