Dilemmas of downsizing during the great recession: crisis strategies of European employers

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The present paper analyzes the choices faced by European employers when threatened with the prospect of the mass lay-off of their employees as a result of the Great Recession. By means of a representative survey among employers in Italy, Germany, Denmark, Poland, theNetherlands and Sweden in 2009, we showthat employers mainly prefer to tackle such threats by offering short-time work, and by early retirement packages to older workers, in conjunction with buy-outs. The latter preference is particularly visible in countries where employers perceive the level of employment protection to be high. The only notable exception is Denmark, where employers prefer to reduce working hours. In general, a sense of generational fairness influences downsizing preferences,with those employerswho favor youngerworkers particularly likely to use early retirement and buy-outs when downsizing, followed by working time reductions. Wage reductions and administrative dismissal are less favored by European employers. In particular, CEOs and owners are more inclined than lowerlevel managers to cut wages. Keywords: Downsizing · Early retirement · Fairness · Older workers · Recession
Original languageEnglish
Pages (from-to)307-329
JournalDe Economist
Issue number3
Publication statusPublished - 2013


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