Downsizing also has a negative
effect on learning and innovation because it breaks the informal networks that have developed over
a period of years (Amabile & Conti, 1999; Reynolds-Fisher & White, 2000). Further disadvantages
to downsizing include: 1) morale issues can surface, 2) growth is stymied, 3) productivity can godown, and 4) employee health and behavioral problems can surface. When considering downsizing,
management must find the right balance.
The literature supported the reality of this instability from the perspective of victims and
survivors. On one side are the victim issues that arise from the downsizing. On the other hand, the
survivors also are subject to health issues. Beyond depressed financial considerations and chaos, the
downsizing process also exacts a heavy emotional and mental toll on employees. An added
examination of factors attached to downsizing and termination revealed that: