Effects of Organizational Downsizing on Survivors

Most organizations use downsizing as a cost reduction strategy in order to compete in today’s fierce competitive environment. But most organizations fail to achieve its objective of cost reduction and increased efficiencies due to its adverse effect on remaining employee. Following the management contract of ETC to France Telecom, this is rebranded as Ethio Telcom, in Ethio Telecom South and South Western Region, Hawassa Shop about 35.5% of employees were reduced in 2011. This project examines what effect the downsizing process has had on the survivors of Ethio- Telecom South and South West Region Hawassa Shop. The total population of the organization was 139 which is less than 200 as a result researcher prefers census method. Data was gathered using questionnaire. The finding indicate existence of survivor syndrome (organizational commitment (decreased levels), perceived promotion opportunities (decreased expectations), job satisfaction (decreased levels), staff motivation (decreased levels), morale (decreased levels) and job insecurity (increased levels), perception of breach of psychological contract, absence of increased work load and high intention of turnover.