Survey of downsizing effects on U.S. based corporations in the Rocky Mountain region

Abstract

The major purpose of this study was to determine the implications of corporate downsizing in today's business environment. The population selected included corporations with greater than 500 employees located in the Rocky Mountain Region of the U.S. The sample size was 160 corporations. Data was gathered through a literature review and a survey instrument. The survey was mailed out with a 47.5% response rate. The main conclusions of the study were: 1. Most large corporations in the Rocky Mountain Region have downsized within the past year or will do so in the coming year; 2. Almost all firms provide at least one form of assistance to departing employees; 3. Almost three quarters of the managers have taken on additional responsibility since downsizing; 4. Three fourths of the firms that have undergone downsizing have experienced no change in market share; 5. More than half have experienced a deterioration of employee morale; 6. The main reasons for the downsizing are: Cost savings, survival, and enhanced communication. The main recommendations were: 1. Firms who have downsized should conduct follow-up research with terminated employees to determine which forms of assistance were most helpful, and if they have found suitable employment; 2. Those firms who are considering downsizing in the future should communicate all aspects of the downsizing effort to employees, and develop programs which will improve employee morale for remaining employees; 3. Business educators should prepare students for the changing business culture of the 1990's and beyond; 4. Business educators should stress the importance of flexibility in the workplace.