Who else cares? A conceptualization of non-investor and non-workforce perspectives on downsizing

Economic downturns, technological change, and increasing cost pressure are shaping a business environment marked by uncertainty, which manifests in various ways, including extensive downsizing measures in the form of headcount reductions. Given the far-reaching social and economic implications of these measures—extending well beyond the boundaries of the implementing firms—an in-depth analysis of the downsizing phenomenon is essential and remains the subject of ongoing academic debate. While existing literature has comprehensively analyzed investor- and workforce-related perspectives on downsizing, research on other stakeholder groups remains fragmented. Considering the increasing interconnectedness of companies and their non-investor, non-workforce stakeholders, this gap has led scholars from several research streams to raise the question: Who else cares? Our systematic literature review of 82 studies addresses this question by providing a comprehensive integration of so-far neglected stakeholder perspectives on downsizing. Building on stakeholder theory, we develop a novel theoretical lens to analyze the existing research systematically. Subsequently, applying a concept development approach, we identify a five-fold stakeholder typology, shaping the downsizing process: (1) Contextual Shapers, (2) Gatekeeping Negotiators, (3) Reputational Sanctioners, (4) Adaptive Responders, and (5) Disempowered Actors. These stakeholder types are thoroughly examined and conceptualized in a Phased Downsizing Stakeholder Engagement model. Our model extends existing downsizing frameworks by incorporating the perspectives of previously underrepresented stakeholders. It offers a promising foundation for research on stakeholder participation and interactions in downsizing processes and provides practitioners with valuable insights into the dynamics of stakeholder involvement in the downsizing context.