DOWNSIZING AND ITS RELATIONSHIP TO NUMBER OF EMPLOYEES

Downsizing has become a common management tool. Unfortunately, many organizations implement downsizing without considering its multiple ramifications for their missions and their stakeholders. A reduction in force response to environmental stress does not always follow from a strategic consideration of the organization's vision, mission and objectives. At one level of the discussion regarding the efficacy of downsizing or restructuring, is the relationship between the number of employees and organizational outcomes. It is at this level that the authors have conducted their research using U.S. freight railroads as their data base. Their results support a leaner organization (in terms of number of employees) and adds to an understanding of the downsizing phenomenon.