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[ 278 ]
Career Development
International
2/6 [1997] 278–286
© MCB University Press
[ISSN 1362-0436]
The survivor syndrome: aftermath of downsizing
Steven H. Appelbaum
Department of Management, The Faculty of Commerce And Administration,
Concordia University, Montreal, Canada
Claude Delage
Risk Manager, Canadian Imperial Bank of Commerce, Montreal, Canada
Nadia Labib
Consultant, Montreal, Canada
George Gault
Senior Structural Engineer, Canadian National Rail, Montreal, Canada
Reports that the fundamental
problem with corporate
restructuring as it is prac-
tised today – as an ongoing
strategy even in profitable
times, rather than as an
emergency move – is that it is
based on a flawed vision of
what makes people and
organizations work well.
Excessive downsizing experi-
ences create a new psycho-
social problem: the “survivor
syndrome”. Examines sur-
vivor syndrome, identifies its
causes and suggests reme-
dies that lead to rebuilding
employee commitment to the
new organization.
From corporate anorexia to
learned helplessness
The trouble with corporate restructuring or
downsizing is not simply that firms are over-
doing it, cutting staff to the point of “corpo-
rate anorexia”. Nor is it simply that greedy
companies are fattening their profits at the
expense of laid-off employees.
The fundamental problem with corporate
restructuring as it is practised today – as an
ongoing strategy even in profitable times,
rather than as an emergency move – is that it
is based on a flawed vision of what makes
people and organizations work well. It creates
an unhealthy culture in the workplace, and
sooner or later we are all going to pay.
While some people thrive in the new envi-
ronment, most of us are not constituted this
way. We like stability and continuity. We are
quite willing to adapt and innovate, but we
require a reasonably stable situation as a
platform for learning and creativity.
One message that comes across loud and
clear in a downsizing is that how well you do
your job does not matter much; you may lose
it anyway. Everyone knows a top performer
who was let go. This teaches people that they
do not control what happens to them on the
job – the most disempowering message of all.
It can lead to a state that psychologists call
“learned helplessness”, a model used to
explain why battered women stay with their
batterers. They find they are liable to get
beaten up no matter what they do, so eventu-
ally they become passive. They learn to keep
their mouths shut. Do not make waves. Just
try to hang on.
Corporate restructuring as it is practised
today speaks a bizarre language. It is a lan-
guage that confuses commitment with co-
dependency and stability with stagnation;
that mistakes moving around for moving
forward. It is a language that puts an entire
society on the wrong track and tries to call it
rightsizing[1].
Background
Individuals vary widely in their openness to
and enthusiasm for change. Generally, the
person most comfortable with any particular
change is the one proposing it. Regardless of
individuals’ attitudes towards change in the
abstract, people generally do find that change
produces anxiety. This is true whether the
change is self-originated or imposed by some
outside agent[2, p. 55]. Organizational change
in the form of reorganizations, downsizing
and mergers are a part of everyday life for
today’s business community. The ability of
organizations to manage change quickly,
positively and productively leads to competi-
tive advantage[3, p. 2]. In these changing
organizations, there are three categories of
people: those who will not lose their jobs,
those who may lose their jobs and those who
will lose their jobs[4, p. xviii]. The first two
categories are referred to as “survivors”.
Excessive downsizing experiences create a
new psycho-social problem: “survivor syn-
drome”. This article will examine survivor
syndrome, identify its causes and suggest
remedies that lead to rebuilding employee
commitment to the new organization.
Downsizing: picking the survivors
Since the late 1980s, hundreds of companies
and millions of workers have been affected by
a new approach to organizational design and
management called downsizing. Downsizing
refers to the planned elimination of positions
or jobs[5, p. 96]. Downsizing may also occur
when an organization reduces work (not just
employees) and implements cost-containment
strategies that streamline activities such as
transaction processing, information systems,
TQM and even re-engineering. We must real-
ize that the elimination of jobs and layoffs is
not over and will be permanent, since there is
a fundamental geopolitical shift in the world
[ 279 ]
of work that will continue for the next 25
years[6, p. 9].
The decision to downsize is usually a
strategic one, undertaken to reduce the
waste and inefficiency that builds up in an
organization over time. It is expected to
improve business development and reposi-
tioning for future growth and success[7,
p. 35]. In 1994, Cameron[8, p. 190] reported
that more than 80 per cent of Fortune 500
companies had downsized in the previous
five years and that 100 per cent were plan-
ning to do so in next five years. Virtually
every sector has caught the downsizing
fever, from federal governments to trade
unions. The results of a survey just referred
to[8, p. 190], observed “more than half of the
1,468 firms that downsized indicated that
productivity deteriorated from downsizing”.
In another survey of 1,005 firms that down-
sized between 1986 and 1991, it was found
that only 46 per cent actually reduced
expenses, only 32 per cent actually
increased profits, and only 22 per cent actu-
ally increased productivity[8, p. 190]. It was
also reported by Markowich[9, p. 59] that,
according to a Wall Street Journal article
published in 1994, “profits increased in less
than half of 531 large companies two years
after restructuring; only 37 percent of 500
companies who downsized since 1987
reported increased profits”. There are many
more recent surveys that have documented
similar results. The basic and a priori
strategic plans do not seem to correlate with
the a posteriori results of studies indicating
less than rousing success.
The objectives are quite well-known before
starting the process of downsizing, as well as
the expected benefits to the organization such
as:
• lower overheads;
• smoother communications;
• less bureaucracy;
• greater entrepreneurship;
• faster decision making; and
• increased productivity[5, p. 97].
In fact, the expected results are mostly quan-
titative but, because of the personal impact
and the sensitive nature of downsizing, orga-
nizations usually try to implement this in a
manner that will minimize negative effects
and publicity, while achieving their perceived
objectives. Some of the statistics reported in
the previous paragraph dispute the expected
outcomes of downsizing and present disturb-
ing findings. Many reasons may explain why
organizations are going through downsizing
and they can be summarized as follows[10,
p. 61]:
• acquisitions and mergers;
• a “quick-fix” to put off closure or
bankruptcy;
• to prepare for privatization;
• to reduce costs to remain competitive in an
increasingly global market.
One of the most common reasons why compa-
nies that downsize perform so poorly is that
they often are successful at anticipating and
preparing for the employees who are to be
released, but they may not be prepared for the
low morale and lower productivity experi-
enced by the survivors of the downsizing[7,
p. 35]. Furthermore, when the organization
needs its people at their best, they happen to
be at their worst[3, p. 5]. The employees are
said to be experiencing what some human
resource professionals are now calling “sur-
vivor syndrome” or “sickness” which will be
the focus of this article.
Muddling through the process
When organizations are going through down-
sizing, they must plan all aspects of the elimi-
nation and reduction of jobs to ensure the
expected outcomes. A downsizing plan must
consider the economic and institutional envi-
ronments (transition assistance, severance
pay, advance notification, etc.), cost benefit
(numbers of employees, exit dates, severance
pays, stay bonuses, relocations costs, etc.)
legal determinants, human resources and
ethical responsibility[10, pp. 63-5].
These aspects are very important to obtain
the expected results, and some omissions on
the planning of downsizing may result in a
failure. Cameron et al. have looked at failures
in downsizing and have come up with these
two majors factors[10, p. 63]:
1 that downsizing has not been effectively
planned, managed, and implemented; and
2 that downsizing has caused resentment
and resistance in surviving employees.
Examining the critical aspects of human
capital and strategic competitiveness, Hitt et
al.[11, p. 35] postulated that the decline in
global competitiveness of companies is attrib-
utable, in part, to neglect of human capital.
This hypothesis is founded on the fact that,
during periods of merger mania and downsiz-
ing, attention is diverted from other impor-
tant issues. While managers must continue to
make short-term operational decisions, other
long-term commitments may be postponed[11,
p. 36]. Also, because investments in human
capital do not bring immediate returns, this
condition may result in lower investment in
human capital.
Steven H. Appelbaum,
Claude Delage, Nadia Labib
and George Gault
The survivor syndrome:
aftermath of downsizing
Career Development
International
2/6 [1997] 278–286
[ 280 ]
Effects of downsizing on surviving
employees
A major factor that contributes to the failure
of most organizations to achieve their corpo-
rate objectives after downsizing is that they
do not adequately and effectively address the
“people factor” throughout the process as it
related to surviving employees. Research
strongly suggests that survivors in the orga-
nization also suffer adverse effects after
downsizing has occurred. Isabella[7] identi-
fied key concerns that focus on career ques-
tions after a downsizing. It was found that
survivors are usually not informed or are
misinformed about many issues, such as
their place in the newly structured organiza-
tion, expected performance standards, the
key people in existing networks either leav-
ing or changing, extra work demands, the
value of their expertise to the new organiza-
tion, and the existence or lack of opportuni-
ties for advancement. These are further com-
pounded by financial and job insecurities.
In discussing terminations resulting from
acquisitions, Schweiger et al.[12, p. 127] indi-
cated that a loss of attachment, lack of infor-
mation, and a perception of “apparent man-
agerial capriciousness” as the basis for deci-
sions on who will be terminated causes anxi-
ety and an obsessive need for survival, which
often leads employees to leave the company
with bitterness and hostility. However,
Schweiger et al.[12, p. 130] indicated that,
ultimately:
It was apparently not the terminations per
se that created this bitterness but the man-
ner in which the terminations were han-
dled. Those who remained...expressed feel-
ings of disgust and anger that their friends
and colleagues were fired…[and] felt guilty
that they were not the ones who were let go
because they believed their co-workers
performed at least as well or better than
they did.
A major factor influencing the effects of ter-
minations on survivors is their perceptions of
how fairly the decisions on terminations were
made and how these were handled. This would
ultimately affect their levels of productivity
and the quality of their job performance.
Motivation theories help to explain this
problem driven by downsizing. “Expectancy
theory”[13] suggests that an individual will
perform and expend only as much effort as is
necessary to reach a desired outcome, and the
extent of the effort depends on the value of that
outcome to them. In this context, if employees
perceive that performance is not a criterion
for job survival, or even for reward, they
will have no incentive to perform. This conclu-
sion is also supported by “reinforcement
theory”[13] that people will perform well
when there have been immediate positive
consequences for good performance. This
implies that, when they perceive negative
consequences to high performance, such as
terminations, demotions, or salary cuts, they
will not be motivated to perform well.
Koonce[14] reports that, in a study of 30
Fortune 500 companies which had experi-
enced downsizing, it was found that poor
employee morale resulted from a number of
factors that were neglected during restructur-
ing; namely, organizations failed to keep their
employees adequately informed about
changes taking place, middle-level managers
responsible for implementing changes did not
receive adequate training for these tasks, and
corporate goals and performance standards
were unclear. In addition to poor employee
morale during and after downsizing, Koonce
further reported that there was management
confusion, reduced worker productivity (at a
time when workloads are higher), and a lack
of commitment on the part of survivors.
In examining the reactions of survivors of
layoffs, Greenberg[15] found that survivors
are in a good position to judge the fairness of
layoffs, both distributively and procedurally.
Surviving employees were found to be more
committed to the organization when they
perceived that the terminated employees
were adequately compensated and equitably
treated. Greenberg also reported that empiri-
cal studies suggest that the current job per-
formance level of employees is a critical
factor in surviving employees’ judgements of
the fairness of the termination process.
The survivor syndrome
Downsizing creates important effects inside
and outside an organizational environment.
In fact, downsizing results in breaking the
organization into several or many groups. A
group of employees leaves; sometimes, a
group may receive advance layoff notification
and a group stays. Confusion is high because
employees who lose their jobs may not really
understand why, since it was not their fault.
The decision is often not related to their per-
formance, while the ones who stay have done
nothing more or special to keep their posi-
tions.
Previous research reveals that organiza-
tions often enjoy an initial increase in pro-
ductivity because employees work harder and
more competitively in an attempt to keep
their jobs[16, p. 10]. This initial increased
productivity is short-lived and is followed by
a strong “malaise” in the organization.
Steven H. Appelbaum,
Claude Delage, Nadia Labib
and George Gault
The survivor syndrome:
aftermath of downsizing
Career Development
International
2/6 [1997] 278–286
[ 281 ]
This survivor syndrome is defined by some
human resource professionals as being the
“mixed bag of behaviours and emotions often
exhibited by remaining employees following
an organizational downsizing”[17, p. 26].
Downsizing has become an organizational
fact of life, and many surveys have confirmed
that the survivors are often ignored before,
during and after the corporate streamlining.
Yet it is the survivors that will be the linch-
pins of future profitability[18, p. 15]. The
employees that lose their jobs during an orga-
nizational downsizing go through an emo-
tionally wrenching experience[19, p. 23]. Yet
the co-workers who remain with their
employers have similar reactions. Today’s
survivors can be tomorrow’s disgruntled,
unproductive workers or tomorrow’s team
players, enthusiastic about being part of a
community at work that values their contri-
butions[20, p. 17]. In assessing a downsizing,
Isabella[7, p. 35] describes downsizing as a
personal, not bottom line, issue for many who
survive it, despite the corporate rationale and
corporate savings. Locus of control is defined
as the extent to which individuals believe
that the control they have over their lives lies
within their own control or in environmental
forces beyond their control[21, p. 97]. Accord-
ing to Noer, the people who will have the most
severe cases of survivor sickness are those
who build their lives around their employer
and the ones who will not are those who
define themselves as more than their job[19,
p. 23]. Buchholz further comments on this:
“people resist being changed, they don’t
resist change. Change is choice”[3, p. 2].
Organizations have under-estimated the
negative effects of downsizing and do not take
into account the difficulties of motivating a
surviving workforce emotionally damaged by
watching others lose their jobs. Yet, motivat-
ing survivors to achieve greater productivity
is essential for company success and
employee job security[9, p. 59].
We must remember that, next to the death
of a relative or friend, there is nothing more
traumatic than losing a job, as it disrupts
careers and families[22, p. 69]. David M. Noer
has found that survivors experience 12 differ-
ent types of negative feelings and concerns.
These are presented in his text: Healing the
Wounds: Overcoming the Trauma of Layoffs
and Revitalizing Downsizing Organizations[23,
pp. 90-3].
1Job insecurity. Survivors wonder how long
they will be able to keep their jobs, and
they worry that they are not prepared to
find work elsewhere, or that there are no
comparable outside jobs. This will influ-
ence their work behaviours and attitudes
on a daily basis.
2Unfairness. Doubts arise about the wisdom
of the layoff choices made by the man-
agers, as well as the competence with
which management has guided the organi-
zation. Most organizations downsized for
the first time, therefore the exercise was
not planned, managed and implemented
effectively. Employees have felt that the
process was not fair.
3Depression, anxiety, fatigue. The process is
demoralizing and stressful for the man-
agers who must lay off employees, as well
as for employees who lose friends and
colleagues. No one is prepared, including
the managers having the difficult task of
announcing the new structure. One poll of
1,142 companies that downsized, con-
ducted by the American Management
Association, revealed that nearly half were
“badly” or “not well” prepared for the
dismantling, and had not anticipated the
kinds of problems that developed subse-
quently. More than half reported that they
had begun downsizing with no policies or
programmes[5, p. 98]. High on the list of
anxieties were often unspoken questions
like: “Will I be the next to go – even though
it looks now as if I’m staying?”[24, p. 90].
4Reduced risk taking and motivation. Many
survivors are afraid to take advantage of
an employment opportunity, accept a new
work assignment, or discuss a work-
related problem for fear that they expose
themselves to criticism or poor perfor-
mance appraisals and, therefore, become
the target of the future layoff. They try to
fit very well into their actual position of
being “safe”.
5Distrust and betrayal. Some employees no
longer sense the organization’s future or
their place as an integral member of the
organization. Employees do not see why
they should be concerned about their
employer, since this employer was not
really concerned for their colleagues. In
some organizations, the process was so
badly organized and implemented that
Mitchell Marks, an industrial psycholo-
gist, went one step further and identified
this strong distrust as the “Perot
Syndrome”. In fact, he compares the lead-
ership styles of most chief executive offi-
cers in US business as the way Ross Perot
decided to walk away from the 1992
presidential contest. At that time, Perot’s
Steven H. Appelbaum,
Claude Delage, Nadia Labib
and George Gault
The survivor syndrome:
aftermath of downsizing
Career Development
International
2/6 [1997] 278–286
“…Organizations have under-estimated the negative effects of
downsizing and do not take into account the difficulties of
motivating a surviving workforce emotionally damaged by
watching others lose their jobs…”
[ 282 ]
supporters were shocked and angry by the
rationale of the decision, resulting in
strong negative emotional reactions[25,
p. 44].
6Lack of reciprocal commitment. Some
employees feel the organization has aban-
doned them. It has not treated them with
the dignity and respect to which they
believe they are entitled. The kind of win-
win situation (employee-employer) devel-
oped over the years was totally cancelled.
7Dissatisfaction with planning and commu-
nication. Lack of communication and ade-
quate preparation of employees for layoffs
causes survivors to view the entire process
with suspicion. Only 44 per cent of compa-
nies that downsized in the last five years
shared details of their plans with employ-
ees, and even fewer (34 per cent) told sur-
vivors how they would fit into the com-
pany’s new strategy, according to a 1992
survey of 1,020 directors of human
resources[5, p. 101].
8Dissatisfaction with the layoff process.
Layoffs that are handled insensitively or in
a humiliating fashion create permanent
resentment amongst employees.
9Lack of strategic direction. The concentra-
tion on short-term cash problems leads
employees to suspect the validity of the
long-term strategy of the organization.
Most companies communicate their long-
term plan and, in a few weeks, priorities
change dramatically. Management energy
is absorbed and all aspects of corporate
culture are diversified[11, p. 38].
10 Lack of management credibility. Some
employees believe management is no
longer capable of addressing the core busi-
ness concerns of the organization.
11 Short-term profit orientation. Some sur-
vivors fear that management will institute
further layoffs if profits do not reach
acceptable levels in the near future.
12 Sense of permanent change. There is an
overall sense that working for the organi-
zation will never be as good as it once was.
Managers who remain after downsizing are
working in a different environment and they
must adapt themselves to this new organiza-
tion that is not as friendly as before. They are
now managing more people and jobs, and
have to work longer hours because their job
descriptions and the expected outcomes have
not changed. They must establish a new net-
work, since some of their contacts are gone or
have been moved. Some managers will adapt,
many are not willing or able to work under
these conditions[5, p. 99]. Furthermore, sur-
viving employees become narrow-minded,
self-absorbed and risk-aversive. Morale sinks,
productivity drops and survivors distrust
management[5, p. 100].
There is also the impact of survivors’ guilt.
This guilty feeling is experienced by the
supervisors who do the laying off, as well as
by the surviving workers. These workers
contemplate why their colleagues were laid
off instead of themselves. Michael Perlman,
principal with M&S Employee Assistance
Programs, believes this guilty reaction is
similar to what happens to people who sur-
vive a disaster such as an aeroplane crash[19,
p. 23].
During times of job insecurity, employees
without job alternatives tend to withdraw
from their jobs psychologically. This psycho-
logical withdrawal results in decreased com-
mitment to the organization, reduced job
performance, reduced job satisfaction, and
increased intent to quit[16, p. 12].
To continue with the impact of employees
quitting the organization, unfortunately,
downsizing is often implemented through
across-the-board workforce reductions. Tac-
tics such as voluntary retirements and attrac-
tive severance packages typically lead to a
loss of the most talented people[11, p. 38]. This
is a counter-productive strategy.
Components of a survivor support
plan
Some organizations provide programmes to
help the employees leaving, but very few
have programmes for the ones remaining. A
survey presented in an article called “Help-
ing survivors stay on board” indicated that
79 per cent of organizations had such a pol-
icy. However, programmes to help those
remaining were much less evident, and the
emphasis appeared to be on the short term
rather the long term. These programmes
focused mainly on work-related skills,
coaching and counselling skills for man-
agers, but very few focused on counselling
the individuals on personal change or, later,
career orientation[17, p. 26].
The reasons why organizations tend super-
ficially to address survivor needs, can only be
speculated on. It is possible they are so unidi-
mensionally focused on the activities relating
to downsizing that they neglect to address
issues pertaining to survivors until they
present a problem; that is, survivor needs are
managed by exception. As Koonce[14] has
documented, most organizations address
these issues only when they find they have
not achieved their corporate objectives and
investigate the reasons for it. Another reason
may be that management in organizations
believes that keeping employees informed
Steven H. Appelbaum,
Claude Delage, Nadia Labib
and George Gault
The survivor syndrome:
aftermath of downsizing
Career Development
International
2/6 [1997] 278–286
[ 283 ]
about downsizing issues is enough. However,
as Isabella[7] and Cameron et al.[26] have
indicated, survivors also need information
about possible future change, new organiza-
tional standards and expectations on perfor-
mance, advancement opportunities, and
growth-security issues within the organiza-
tion.
There are some critical incidents which can
help shed more illumination on this issue.
Kodak downsized five times at a cost of $2.1
billion and more than 12,000 jobs were elimi-
nated, profit margins were halved, the stock
performed poorly, and the bottom line is not
much bigger than it was ten years ago. In the
last five years, IBM has eliminated 100,000
jobs from its ranks, with another 100,000
voluntary and involuntary casualties likely.
IBM still lost $7.8 billion[27, p. 13].
These negative outcomes were called by
some researchers the “productivity paradox”,
because the cost reductions were cancelled by
other cost increases[10, p. 62].
Justice must be present during the process
of downsizing and employees must perceive
that the method used was fair[16, p. 9]. In fact,
when the survivors feel that the situation was
handled fairly for both those leaving and
those remaining, the symptoms of the sur-
vivor syndrome are still apparent, but have
been alleviated[17, p. 28].
In another survey, completed within the
financial services industry, the most commu-
nicated subjects were about organizational
issues, but very little dealt with how the indi-
vidual survivors fit into the new organiza-
tion[17, p. 28]. Thus, while the communica-
tion process existed, and employees under-
stood the layoff rationale put forth by the
company, they did not feel that the rationale
was valid[16, p. 11].
Because employers do change the rules,
employees have strong negative responses
which affect productivity. Consequently, the
reduction does,in these cases, cancel the cost
benefits from downsizing, resulting in fact in
double failure: the financial strength and the
human aspect. Some remedies are required to
counteract and manage survivor syndrome.
Remedies to survivor syndrome:
managing perceptions and
communications
It is inevitable that people are going to feel
stressed after downsizing. The question is,
how can they become motivated, loyal employ-
ees committed to the organization again?
There are many barriers to precise perception
(perception distortion), each a possible source
of misleading or distorted information[21, p.
105]. Employees may distort information or
pay attention only to what they want to see in
order to avoid the unpleasant reality of down-
sizing. Their ability to accurately perceive
what is going on may be influenced by their
own career interests[21, p. 82]. The employee’s
perceptions are based on the organization’s
actions and communication[10, p. 70]. The
way employers interact with survivors plays
a major part in how employees deal with the
period immediately after downsizing[28, p. 18].
Noer comments, “People can no longer be
perceived as costs to be reduced but instead
must be seen as long term assets to be grown
and developed”[29, p. 27]. Helping survivors
achieve greater productivity is essential for
company success and employee job security.
Employees cannot support the changes the
organization is making if they do not know
what is going on. The prevention of survivor
syndrome begins before downsizing is imple-
mented. The employer should have as
detailed a plan to deal with survivors as he
does with the downsized employees. In a
study carried out by Cameron[8, p. 201] it was
concluded that “the firms that improved their
performance were those that prepared for
downsizing in advance” and that “gradual
reductions were consistently associated with
performance increases”. Performance
increases will be achieved only if the sur-
vivors are properly prepared, motivated and
communicated with openly. Therefore, com-
munication becomes an underpinning of the
survivor syndrome remedy.
If the organizational climate is one of open-
ness and trust, then incomplete or controver-
sial communications are more likely to be
interpreted favourably. However, when dis-
trust is the norm, as in many downsizing
operations, messages may be harshly scruti-
nized for “hidden meanings”, and even good
news may be greeted with suspicion and
ridicule[21, p. 580]. Gaining and maintaining
the trust of others require continual effort
and willingness to engage in honest and
frank dialogue[21, p. 583].
Poor communication creates misunder-
standing of goals and strategic mission, as
well as misconceptions about team relation-
ships and individual responsibilities[21,
p. 570]. It spurs anxiety and conflict, a sense of
disenfranchisement, poor productivity and
increased cost to the company[21, p. 570]. This
is the problem and challenge associated with
managing the survivor syndrome resulting
from downsizing.
Employees cannot support the changes the
organization is making if they do not know
what is going on. In a survey of 30 companies,
46 per cent of the respondents said that “com-
munication” contributed most to good
Steven H. Appelbaum,
Claude Delage, Nadia Labib
and George Gault
The survivor syndrome:
aftermath of downsizing
Career Development
International
2/6 [1997] 278–286
[ 284 ]
employee morale during their transition.
Conversely, the poll indicted that 50 per cent
said “uncertainty and the unknown” had the
most negative impact on morale[14, p. 23].
While informal networks serve useful func-
tions by cutting red tape and leading to
greater loyalty through positive social rela-
tions, they also may give birth to grapevines.
Because they are flexible and personal,
grapevines may be one of the most rapid
communication systems that exist in most
organizations[21, p. 581]. The accuracy of
grapevines is quite high for non-controver-
sial information, but with controversial
information, that is, downsizing decisions,
the grapevine can be greatly in error. One of
the varieties of information passed through
grapevines is the rumour. Rumours are
unverified beliefs transmitted from one per-
son to another. Because rumours can harm
both individuals and the organization itself,
managers must consider how to control and
eliminate the rumour mill[21, p. 581]. Keeping
the lines of communication open often sup-
presses the rumour mill[14, p. 23]. Smeltzer in
1991 highlighted the importance of communi-
cation and collaboration in his study of
change in 43 organizations. The most com-
monly cited reason for failure of the change
effort was the presence of inaccurate and
negative rumours, often caused by manage-
ment neglecting to provide timely and accu-
rate information[30].
Solutions to the survivor
syndrome: employee empowerment
We may think that the survivor syndrome
may be reduced only by the actions of the
employers, but some efforts must be taken by
the employees to counterbalance perceptual
and communication problems just described.
Noer discusses in his book, Healing the
Wounds: Overcoming the Trauma of Layoffs
and Revitalizing Downsized Organizations,
that those who built their lives around their
employer will be the most severe cases of
survivors[23].
Cascio described the new reality in the
workplace and called it the diminishing
expectations. Twenty years ago, a manager
worked for only one or two companies in his
or her entire career. As Cascio reported,
“People used to be able to count on the organi-
zation and its stability. But the myth that
institutions will take care of us has been
shattered”[5, p. 101].
Employees need to consider shifting loyalty
to employabilities within the organization.
For the individual, it offers the chance to take
on broad personal career ownership, rather
than listening to the rhetoric, and feeling
more empowered. For organizations, it offers
the chance to achieve more flexible and pain-
less change, and the opportunity to generate
more appropriate behaviour. However, it will
be more challenging for organizations, since
employees become more able to leave, but also
more motivated to stay[17, p. 28].
Noer believes employees who “break the
chain of co-dependence (with their employer)
are immune” to survivor sickness. He adds
that layoff survivor sickness is a symptom
and that unhealthy dependence on the orga-
nization is the disease[19, p. 23].
Noer also mentioned that, under this new
contract, no guarantee of employment exits.
The focus now is on performance; loyalty
(seniority, for example) is no longer
rewarded[6, p. 9].
Some prescriptions
The actual separation of downsized employ-
ees is very painful for most of those remain-
ing, and the way employers interact with the
survivors plays a major part in how employ-
ees deal with the period immediately after
downsizing. Good communication is the glue
that binds an organization together[31, p. 21].
It prepares and helps employees change and
buy into the new business reality with trust,
loyalty and enthusiasm. Surviving employees
must get a sense that they are part of a new
organization that is moving ahead.
Cameron[8, p. 207] has a few suggestions in
his “Prescriptions for best practices” on how
to deal with survivors before, during and
after downsizing:
• Over-communicate to the employees
because they desire and need information
about the downsizing process and its
progress. Inform them frequently, honestly
and consistently as the downsizing process
unfolds. Only reporting the decisions and
results allows rumours and ambiguity to
flourish.
• Implement downsizing beginning with
small changes that can be done quickly and
easily to achieve the desired results, rather
than attacking downsizing as a large, com-
plex, indivisible task.
• Provide equal attention and support for
those who stay in the organization and
those who leave the organization, rather
than focusing only on the benefits for casu-
alties.
• Provide training, cross-training, and
retraining in advance of downsizing to help
individuals adapt to downsizing, rather
than relying merely on post hoc on-the-job
training.
Steven H. Appelbaum,
Claude Delage, Nadia Labib
and George Gault
The survivor syndrome:
aftermath of downsizing
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[ 285 ]
• Involve employees in identifying what
needs to change through downsizing and in
implementing those changes, rather than
driving downsizing from the top down.
• Hold everyone accountable for downsizing
goals, rather than treating it as only top
management’s responsibility.
• Associate downsizing with a clearly articu-
lated vision of a desired future for the orga-
nization, not merely as an escape from the
past.
• Project positive energy and initiative from
the leader in order to motivate the work-
force, instead of adopting a defensive and
paranoid perspective.
• Management should talk to the “stars”, that
is, the people who have the most job options
outside the company, to ensure they know
they are needed and that they have a future
in the surviving organization.
• The reduction must be handled as fairly as
possible before, during and after the layoffs.
The survivors will be paying close attention
to how the layoff is carried out, how fair it
is, and how the work environment will be
different.
Some additional suggestions[27, p. 18] are as
follows.
1To improve trust in management:
• make senior management more visible;
• explain reasons for downsizing;
• explain criteria used to decide who was
terminated.
2To improve morale:
• provide many opportunities for employ-
ees to have questions answered;
• communicate as specifically as possible
the future mission of the organization;
• let survivors know how terminated
employees are being supported.
3To improve productivity:
• train supervisors in how to motivate and
manage survivors;
• help survivors determine how to handle
increased workload.
4To improve stress levels. train survivors
how to manage change and transition.
Conclusion
Most organizations have neglected the down-
side of downsizing because they assume that
the survivors will simply be pleased and
happy about keeping their jobs.
The unspoken assumption is that those
remaining (who were lucky enough) will
produce more than the entire group did
beforehand. This usually does not happen.
Rather than being thankful to keep their
jobs, employees are demoralized and less
loyal, more angry, cynical and distrustful of
management, fearful that one round of lay-
offs promises others – and that they will be
next.
Not surprisingly, euphemisms have
emerged expressing employees’ anger. Those
who carry out layoffs are “executioners”.
Laid-off employees are “victims”, while those
who remain are “survivors”.
The effects on survivors and executioners
are relatively visible. Effects on others are
not as visible, but they, too, cannot be
ignored. We should be especially concerned
about effects on teenagers and children, for
whom dreaming about a future occupation is
critical for occupational development. Yet
they are now more likely to question what
awaits them. Children learn about work by
observing their parents, and the lesson now
is that their occupational futures are uncer-
tain and out of their control. Hard work at
school may not result in positive job
prospects.
Perhaps massive layoffs could be justified if
they enhanced organizational functioning.
Yet layoffs do not necessarily solve the prob-
lems for which they are the proposed solu-
tions. A recent study of Fortune 500 organiza-
tions engaged in layoffs showed that the
more severe the layoffs, the worse the organi-
zation’s long-term profit margin and return
on equity. If the giants are negatively
affected, can smaller organizations with
fewer resources escape similar negative
effects[32]?
By being fair in layoff procedures, by care-
fully following a strategic plan and using
leadership, downsizing may be possible with-
out permanent disability if senior manage-
ment takes a moment to weigh the human
resource factors versus the financial bottom
line.
Even if we know that organizations will
experience ongoing changes, more companies
must focus strategically on the survivors to
boost productivity. It is a fact survivors are
talented people/resources whose knowledge,
experience and skills need to be developed as
fully as possible to ensure that the organiza-
tion’s new “lean and mean” management can
reach its objectives.
Human capital research and development
are the key areas to ensure that organizations
will meet the coming challenges.
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