They offered them 1.2 times of their monthly salary for the rest of their service in the form of cheques. The scheme also comprises the insurance rider — in case of Employees death, their family would continue to get the benefit,” he said.
“The number of employees has been reduced from 77,448 in 1994 to 52,167 in 2000 and to 39,658 in 2005”.
Downsizing Effects: Overall Mixed effects on firm performance: some short-term costs savings, but long-term profitability & valuation not strongly affected. Firm’s reputation as a good employer suffers. Example: Apple Computer’s reputation as good employer declined after several layoffs in 1990s.
Downsizing forces re-thinking of Employment Strategy .
Lifelong employment policies not credible after a downsizing.