Creating a concession climate: the case of the serial downsizers

This paper uses panel data from New Zealand from the years 1995 and 1999 to examine the impact on those organizations, size fifty and over, that engaged in repeat downsizing during this period. It was found that, during the panel period, approximately 20 per cent of the 322 organizations in the survey had engaged in the permanent reduction of their workforce in both periods. When compared with organizations in the survey that had not engaged in downsizing in both periods, it was found that the repeat downsizers exhibited characteristics that were little different from those that had downsized only in the later period, who reported the greatest decline in performance. However, those who had downsized only in 1995 had, by 1999, largely recovered from the initial negative effects. The repeat downsizers appear to have created a long-term concession climate that is associated with negative workplace performance.