Introduction

Organizational downsizing surrounds us. There was a significant surge in organizational downsizing in public sector organizations in the late 1970s and early 1980s (Bozeman and Slusher, 1979; Glassberg, 1978; Levine, 1978). In the late 1980s and the 1990s, organizational downsizing also became prominent in the private sector (Freeman and Cameron, 1993). By one estimate (Kozlowski, Chao, Smith, and Hedlund, 1993), 66 percent of firms with more than 500 employees intentionally reduced their workforces during the latter half of the 1980s. During that entire decade, several million manufacturing jobs were lost through downsizing (Kozlowski et al., 1993). According to Littler and Innes (2004), the pace of private sector downsizing in the 1990s was similar, with 68 percent of organizations represented in a 1992 British Institute of Management Survey reporting a delayering or restructuring exercise in the previous five years.

More recently, organizational downsizing has undergone another renaissance in the public sector, with deficit-ridden state and municipal governments in the United States laying off teachers, furloughing workers, and taking other workforce reduction measures in an attempt to shrink the size and cost of government (e.g., Medina, 2011; Otterman, 2011). In Europe, the bursting of the housing and banking bubbles have produced implosions in economies, such as those of Ireland and Spain, and these implosions have led to higher interest rates on government debt, austerity policies, and intense bond market pressure for downsizing of government work forces.