Understanding Downsizing from the Customers’ Perspective: The Role of Customer Uncertainty and Downsizing Communication

Abstract

During the last two decades, more and more firais have relied on downsizing, i.e., major work force reductions, to cut costs and improve productivity and competitiveness. For instance, in 2006 and 2007, Ford cut 30,000 jobs in line with a turnaround program in North America. In 2007, Johnson & Johnson announced the elimination of up to 4,800 jobs worldwide and Airbus announced a three-year cost-cutting program including up to 10,000 job cuts. However, there is no clear consensus in the literature, whether downsizing increases organizational efficiency or not.