Surviving, not thriving: The impact of downsizing on team-based organizations

Abstract

While the negative effects of downsizing on survivors have been well documented, in the context of teams, these negative effects are less understood, even though they can potentially be magnified. In this article, we combine research findings in teams with the experiences of team members who survived a recent episode of downsizing. Our intention was to confirm the negative repercussions of downsizing both for survivors and for the organization, as well as to provide prescriptions for buffering these effects within teams. Specifically, we extend previous research by documenting the negative association of downsizing with turnover from teams and from the organization, and we explore how downsizing might disrupt or damage the relational, psychological, and productive bonds that make teams valuable to organizations. When downsizing is unavoidable, we offer leaders of team-based organizations prescriptions to consider before, during, and after downsizing. Our prescriptions are intended to contribute to restoring trust, reestablishing a safe environment, and reforming the social, productive connections that allow teams and their members to flourish.