Information technologies and downsizing: Examining their impact on economic performance

Abstract Recent literature analyses the economic effects of employee downsizing on organizations under a contingent framework. Information technology (IT) can be considered a relevant factor for organizations that downsize. IT could enhance knowledge management, innovation management and organizational learning. Given the damage produced by downsizing on these organizational capabilities, the aim of this research is to study the moderating role of the implementation level of IT in the relationship between downsizing and organizational economic performance. Analyzing Spanish chemical industry, our results show that this negative effect can be mitigated by IT implementation.