Explaining individuals' justification of layoffs

Abstract

This research addresses why organizational downsizing, given its adverse impact on both organizations and individuals, continues to be a popular management practice. Drawing on system justification theory, we argue that individuals justify downsizing to preserve the legitimacy of the prevailing social‐political system. Across two studies, we surveyed a total of 527 employees and examined whether the perceived likelihood of downsizing, past experiences of layoffs, and the anticipation of future layoffs enhance individuals' justification of downsizing. We also took into account cognitive and motivational biases for justifying the status quo. Our results indicate that individuals' motivation to defend and justify downsizing may strengthen its stability within society, even though implications are largely negative for those involved.