Organizational Downsizing: An Introduction

In discussing the current downsizing of organizations with Professor Robert T. Golembiewski of the University of Georgia, he differentiated between “downsizing by need” and “downsizing by preference.” How did he define these terms? In “downsizing by need,” we have the classic layoff situation in which the organization is faced with a change in its environment, markets, or there is a great technological change (e.g., automation) whereby workers have to be laid-off, sometimes permanently. In a situation of “downsizing by preference,” however, the organization may be financially sound, even making record profits for private-sector firms, but still follows a policy of laying-off significant numbers of employees. What motivates such behavior? Why is it tolerated? What may be our future?