Downsizing of Labour – Forms and Their Rationale

Abstract

Though the concept of downsizing of workers is as old as the concept of firm itself, the process gained momentum in India post 1980s, when mechanization of workforce was emphasized. Downsizing is the systematic reduction of a workforce through an intentionally instituted set of activities by which organizations aim to improve efficiency and performance (Appelbaum et al., 1987b; Cameron, 1994a; Cascio, 1993). It can take various forms, namely - closure, strikes, lock-outs, lay-offs, redundancy and retrenchment of workers. The key objective of the study is to understand the meaning and rationale for downsizing workforce in an organization or sector and identify those key variables which play an important role in the process. The concluding remarks as an afterthought briefly highlight the options or measures available to workers who have been affected by downsizing.