Industrial-organizational psychologists may be involved in downsizing by advising how layoff news is delivered to departing and retained employees, supporting laid-off employees through measures such as separation packages, and supporting employees who remain after downsizing.

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Columbia University

Downsizing is a corporate strategy, often implemented when a business fails to meet its profit objectives, that involves the termination of a large number of its employees.

Downsizing

Spielman, R. M., Jenkins, W. J., & Lovett, M. D. (2020, April 22). Psychology (2nd ed.). OpenStax. https://openstax.org/books/psychology-2e/pages/1-introduction

OpenStax Psychology (2nd ed.) Textbook

Roles of Industrial-Organizational Psychologists in Downsizing

Downsizing events can negatively impact the employees who remain with an organization. These effects include a greater likelihood of quitting, reduced organizational commitment, and heightened feelings of job insecurity.

Effects of Downsizing on Retained Employees

After a company announces it is terminating a significant portion of its workforce to cut costs, employees who keep their jobs often experience a range of psychological reactions. Based on the provided case study, analyze the likely emotional and cognitive responses of the *remaining* employees at Innovate Inc. and explain the reasoning behind these reactions.

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