Downsizing in crisis - A comparative study on downsizing processes in Greece during the financial crisis

Abstract

Downsizing is a subject increasingly studied during the last decades and from many different perspectives. However, the major part of the literature involves research during periods of economic stability. The special economic situation that Europe -Greece included- goes through calls for further research on many levels and aspects. This paper aims to discover how Greek HR managers performed downsizing during the years of financial crisis. Ten semi-structured interviews were conducted with nine HR managers and one CEO from ten different companies in Greece. The analysis of the results was based on institutional theory as well as on Cameron's framework on downsizing strategies.

The outcome is that the preferred downsizing strategy is workforce reduction, using mainly dismissals. Other ways include early retirement packages, reduced work hours, job rotation, salary cuts and hiring freeze. The HR managers usually have to consider social criteria such as marital status or number of children, or performance criteria to decide who has to be laid-off. However, the decision is taken in conjunction with a line manager or the department's director. Depending on the sector, the HR manager has to handle the relations with the trade unions as well.