TECHNOLOGICAL DISCONTINUITY AND WORKFORCE SIZE: AN ARGUMENT FOR SELECTIVE DOWNSIZING

In this paper I begin to answer the neglected question of “When to downsize?” Specifically, is downsizing and the associated reskilling of workforces an appropriate response to technological discontinuity? Based on past organizational literature written about technological discontinuity, downsizing, and reskilling, I develop a theoretical framework that indicates when downsizing following a technological discontinuity will increase organizational effectiveness. Propositions are developed based on this framework. The paper concludes with a discussion of the implications for managers and future researchers.