Introduction

Downsizing as a management tool was first introduced in the US during the mid-20 th century. It
refers to the process of reducing the number of employees on the operating payroll by way of
terminations, retirements or spin-offs. The process essentially involves the dismissal of a large
portion of a company's workforce within a very short span of time. Organizational downsizing
has been implemented for more than two decades. During the late 1980s and 1990s, it was
implemented primarily by firms experiencing economic issues during the development in the
1990s, downsizing has become a part of the firms activities around the world. The major
importance of most downsizing efforts is for reduction of costs and increased level of efficiency,
competitiveness, productivity, profitability, management etc. This strategy of downsizing has
gained importance and the need to study which has lead some great authors and scholars a
discreet interest to study the same.
Statement of the Problem
Since the late 90s layoffs is one of the strategies by the organisation to achieve stability and
efficiency in business which again is influenced by numerous internal and external forces.
Todays downsizing has become a normal function of the organisational. Layoff is a
deliberate decision to reduce the workforce that is intended for various reasons. The question
is which stands vivid here, downsizing is beneficial or does it hinder the growth of the
organisation...? Several scholars suggest that downsizing is beneficial however there are a
number of factors influencing them such as management, costs etc. Survivors at downsizing
can have a both negative and positive attitude some of them may find it joyful and pride that
the organisation needs them and the others may find themselves insecure. The success of
downsizing depends on how effective it is towards the organisation and adoptable by its
.Most of the time layoffs may not be successful as expected. Hence the study intends to find
out the reasons and effects of downsizing from the employees point of view.

Scope of the study

The area of study includes Bangalore city and the IT & ITES sectors in respect to private
sector organisations in urban Bangalore. The companies chosen for the study includes

Hewlett Packard, Northern Trust, Goldman Sachs, Tata Consultancy Services, Swiss Re. The
employees included in the studied were of less than five years of experience in the company
with the age group ranging from 21-26. Employees from various departments and
designations were included.

Objectives of the Study

1. To study the practices of downsizing.
2. To study the various reasons for layoffs / downsizing.
3. To study the effects of layoffs on employees.
4. To study the effects of layoffs on the organization

Methodology
Sources of data:
Primary data: questionnaire method was used 15 questions were posed before the
respondents with the attributes ranging from strongly agree, agree, not sure, disagree and
strongly disagree.
Secondary data: the data was collected from the college library, books, magazines, journals.
Sampling technique: Simple Random sampling was used in the study.
Sampling frame: employees from the middle level of the organisation with age group from 2126 were included in the study from companies viz: Hewlett Packard, Northern Trust,
Goldman Sachs, Tata Consultancy services, Swiss Re.
Sample size: 100
Tool of data analysis
The oxford college of business management Page 47

Chi square analysis was used to test hypothesis and percentage method was used to analyse
Data

Limitations of the study

Time was a major constraint.
Cost constraints were one of limitations of the study. Apart from that there are a number
of IT companies with a base in Bangalore so random sampling was used as a selection of

companies
Chapter Scheme
1.1 Introduction
Downsizing is a phenomenon which cannot be eluded easily. Downsizing is also futile and
self-destructive. At times however reduction in workforce is essential. Evidences show that
downsizing is more likely to be more effective when it a part of the organizational overall
strategic plans.
2.1 Research design
Data is to be collected through primary and secondary methods, using questionnaire as a
source for primary method and magazines, journals, books and internet as a source for
secondary method. The data thus obtained is further analysed and interpreted.
3.1 Profile of the company
The study on downsizing and employee perception is a sole study and done under freelance.
however the following companies have been included. HP, Northern Trust, Goldman sachs,
Tata consultancy services, Swiss re.
4.1 Analysis and interpretation of data
The data obtained through primary and secondary sources is further analysed and interpreted
through implementation of statistical methods such as use of graphs so as to reduce ambiguity
and through the use of chi square tests.
5.1 Summary of findings conclusions and recommendations The findings will be the result of the
questions posed to the respondents of the study. The
answers such obtained will be analysed and percentage calculated and a conclusion as to the
percentage of employees as to the perceptions of downsizing will be obtained