Abstract
This study broadly assesses the association of organizational downsizing to work conditions and employee outcomes, and the extent to which work conditions mediate the association of downsizing to employee outcomes, thereby serving as targets for workplace intervention to reduce the harmful effects of downsizing on surviving workers. The cross-sectional data came from a national probability sample of 2297 U.S. workers. A parallel multiple-mediator model with multiple outcomes was estimated, adjusting for personal, occupational, geographic, and temporal covariates. Exposure to downsizing was the predictor. A set of 12 work conditions, representing four dimensions of the work environment, served as simultaneous mediators (Work Role: work demands, role conflict, role ambiguity, and work autonomy; Interpersonal Relationships: supervisor aggression, coworker aggression, friendship formation, and dysfunctional leadership; Rewards: distributive justice and promotion opportunities; Security: job insecurity and employment insecurity). A set of 16 employee consequences, representing five categories of outcomes, served as simultaneous outcomes (Inability to Detach from Work: negative work rumination and inability to unwind after work; Energetic Resource Depletion: physical, mental, and emotional work fatigue; Negative Affect: depression, anxiety, and anger; Positive Affect: happiness, confidence, and vigor; Health: physical and mental health; Work Attitudes: job satisfaction, organizational commitment, and turnover intentions). The results indicated that downsizing had an adverse association with nine of the 12 work conditions (higher levels of work demands, role conflict, supervisor aggression, dysfunctional leadership, job insecurity, and employment insecurity, and lower levels of friendship formation, distributive justice, and promotion opportunities) and all 16 employee outcomes. Moreover, the associations of downsizing to the employee outcomes were indirect, collectively mediated by the nine work conditions. This study provides the broadest evaluation of the deleterious effects of downsizing on U.S. workers surviving a downsizing, identifies affected work conditions that can serve as targets for workplace interventions, and provides insight into why organizational downsizing often fails to deliver anticipated financial and performance benefits to organizations. In terms of serving as targets for workplace intervention, some work conditions meditated the associations of downsizing to a broad set of employee outcomes, whereas other work conditions were specific to certain outcomes. The broad mediators should be targets of any intervention aimed at reducing the adverse effects of downsizing, with additional workplace targets depending on the class of outcomes to be addressed by the intervention.
Highlights
Organizational downsizing represents the strategic reduction of an organization’s workforce to reduce labor costs, increase profitability, and in times of severe economic shock, to prevent organizational collapse [1]
The results indicated that downsizing had an adverse association with nine of the 12 work conditions and all 16 employee outcomes
To assess overall confirmatory factor analysis (CFA) model fit, we report the model chi-square with its degrees of freedom, and because this statistic can be overly sensitive to large samples [49,50], we report the following approximate fit indices: (a) the comparative fit index (CFI), (b) the Tucker-Lewis index (TLI), and (c) the root mean square error of approximation (RMSEA) and its 90% confidence interval
Summary
Organizational downsizing represents the strategic reduction of an organization’s workforce to reduce labor costs, increase profitability, and in times of severe economic shock (e.g., recession), to prevent organizational collapse [1]. (a) displaced workers who involuntarily lose their jobs (victims) and (b) workers who survived the downsizing (survivors). A large body of research shows that involuntary job loss from downsizing is stressful and results in a variety of adverse outcomes among victims, such as poor physical and mental health and excessive alcohol use [6,7,8,9], as well as scarring effects after reemployment, such as wage penalties and sustained poor mental health [10,11]. Research implicates downsizing in detrimental effects on surviving employees, Maertz, Wiley, LeRouge, and Campion [12] pointed out that “there have been few valid direct tests of the supposed negative main effects [of downsizing] on survivor reactions and retention. We use a large national sample of U.S
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