Is downsizing an effective organizational strategy?
” • “Do massive reductions in workforce truly benefit shareholders and the organization?” • “What is the real cost of downsizing in tough economic times?” The Full Cycle After ten years of a Nasdaq tech boom in the 1990’s, the “dot com” bubble burst in the spring of 2001, leaving thousands of employees out of work. Employees went from being the most sought-after to unemployable for as many as five years. In the hi-tech downturn nearly a decade past, educated workers with special technical skills could not find jobs to match their experience and education. Twenty percent of the 1.9 million workers, who were left unemployed for six months or more, were former executives, professionals, and managers. But the vast majority—four out of five of the unemployed workers—were under-trained, under-educated, and unskilled. They were mostly “jobbers,” a large corps of workers who performed repetitive tasks, lacked mastery, and failed to work in professions or trades that directly contributed to the
