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Downsizing is dead; long live the downsizing phenomenon: Conceptualizing the phases of cost-cutting

Published online by Cambridge University Press:  02 February 2015

Franco Gandolfi  and
Craig R Littler
Franco Gandolfi
Affiliation:
School of Business, California Baptist University, Riverside, CA, USA
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Abstract

Downsizing as a systematic reduction of employees is frequently utilized in order to increase productivity, efficiency, profitability, and competitiveness of organizations. As a strategy of choice for many firms around the world, downsizing produces far-reaching financial, organizational, and social consequences. Despite the large body of literature, there is inconclusive evidence as to whether downsizing is effective and whether it generates the widely anticipated benefits. Employee downsizing as a change management strategy has been actively adopted for more than three decades. This downsizing article presents a phase typology of job cutting including three distinct phases and three levels of argument. As a conceptual paper, it aims to examine, update, and extend Littler and Gandolfi's (2008) seminal work. The research paper culminates with a discussion of current downsizing practices, and posits that the downsizing phenomenon has remained a popular restructuring.

Keywords

downsizingphenomenoncost cuttingphaserestructuringstrategy
Type
Research Article
Information
Journal of Management & Organization , Volume 18 , Issue 3 , May 2012 , pp. 334 - 345
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2012

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Footnotes

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Tribute: Craig R. Littler was Head of School of Business at James Cook University after having returned to Australia from appointments at the Universities of London and St Andrews. Professor Littler was an exceptional academic with a strong international reputation. As a distinguished management scholar and business thinker, Dr Littler was an influential and leading contributor to ANZAM and the management academies in Australia and overseas. As my mentor and role model, Craig was a remarkable man who provided a learningrich research environment, always striving for excellence, promoting innovative thinking, and pursuing out-of-the-box solutions.

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