n South African Journal of Labour Relations - Downsizing the downside of downsizing : a revised planning model

Volume 26, Issue 2
  • ISSN : 0379-8410
  • E-ISSN: 2520-3223



In today's global economy, organisations have increasingly adopted cost/competitive measures to improve performance. Both a world-wide recession and a financial crisis or major economic downturn in one large economy such as that of the United States may have a domino effect on organisations world-wide, as recently happened in the electronics and information technology industries. Many inevitably seek to survive these pressures by downsizing, using layoffs/retrenchments. Fewer Japanese, other east Asian and also South African multinational firms which traditionally offered "iron rice bowl" employment security are able to offer this psychological contract any longer. How can layoffs be prevented, and their adverse effects ameliorated in a planned way? Do layoffs reflect a lack of effective human resource planning to ensure a relatively stable core work force across business cycles? Building on the literature, this article proposes an integrated model for planning and implementing downsizing which has three key components, namely decision planning, survivor support and termination plans. This framework may result in better organisational performance, work commitment and organisational justice.

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