Organizational downsizing, work conditions, and employee outcomes: Identifying targets for workplace intervention among survivors

Abstract

This study broadly assesses the association of organizational downsizing to deleterious 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 2,297 U.S. workers. A parallel multiple-mediator model with multiple outcomes was estimated, adjusting for occupational, geographic, and temporal covariates. Exposure to downsizing was the predictor, a set of 12 work conditions served as simultaneous mediators, and a set of 16 employee consequences served as simultaneous outcomes. Downsizing had an adverse association with 9 of the 12 work conditions and all 16 employee outcomes. Moreover, the associations of downsizing to the employee outcomes were indirect, collectively mediated by the 9 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 outcome to be addressed by the intervention.