Organizational Downsizing and Depressive Symptoms in the European Recession: The Experience of Workers in France, Hungary, Sweden and the United Kingdom

Abstract

BackgroundOrganizational downsizing has become highly common during the global recession of the late 2000s with severe repercussions on employment. We examine whether the severity of the downsizing process is associated with a greater likelihood of depressive symptoms among displaced workers, internally redeployed workers and lay-off survivors.MethodsA cross-sectional survey involving telephone interviews was carried out in France, Hungary, Sweden and the United Kingdom. The study analyzes data from 758 workers affected by medium- and large-scale downsizing, using multiple logistic regression.Main ResultsBoth unemployment and surviving layoffs were significantly associated with depressive symptoms, as compared to reemployment, but the perceived procedural justice of a socially responsible downsizing process considerably mitigated the odds of symptoms. Perception of high versus low justice was assessed along several downsizing dimensions. In the overall sample, chances to have depressive symptoms were significantly reduced if respondents perceived the process as transparent and understandable, fair and unbiased, well planned and democratic; if they trusted the employer’s veracity and agreed with the necessity for downsizing. The burden of symptoms was significantly greater if the process was perceived to be chaotic. We further tested whether perceived justice differently affects the likelihood of depressive symptoms among distinct groups of workers. Findings were that the odds of symptoms largely followed the same patterns of effects across all groups of workers. Redeploying and supporting surplus employees through the career change process–rather than forcing them to become unemployed–makes a substantial difference as to whether they will suffer from depressive symptoms.ConclusionsWhile depressive symptoms affect both unemployed and survivors, a just and socially responsible downsizing process is important for the emotional health of workers.

Health Impacts of the Great Recession: a Critical Review

“…At the individual level, the loss of one’s job, income, or investment wealth stemming from the Great Recession conveyed excess risk for psychological distress in both Europe and the U.S. [24, 42–46]. Multilevel studies suggested that the psychological impact of the Recession’s onset extended beyond those who were directly affected financially, although this group suffered the most [26, 47].…”

Unemployment and mental health

“…In terms of prevention, securing fair and transparent processes during downsizing is one avenue, as not just becoming unemployed, but also features of the process matter for mental health 8 9. The strong links between unemployment and poor mental health has eagerly been translated to ‘work is good for health’.…”

A Difficult Burden to Bear: The Managerial Process of Dissonance Resolution in the Face of Mandated Harm-Doing

“…Studies have repeatedly shown that harmdoing events such as downsizing have moderated effects when targets perceive the process as fair, well-planned, and when they trust the employer's claim that the event is necessary (Brenner et al 2014). The support of the enactor is critical in communicating these qualities to harm-doing targets, as they provide the interface for communication between top management and those who are subject to the harm-doing.…”

“…Finally, large-scale harm-doing events such as downsizing are often viewed with distrust and uncertainty by managers (e.g., Brenner et al 2014) as an increasing number of decision-makers note that the strategy has questionable results (Cooper et al 2012). Thus, managers in organizational crisis situations (those that most commonly lead to harm-doing events) may be forced into performing certain acts with which they disagree or disapprove-being placed in the role of enactor, but not decider.…”