Dilemmas Of Downsizing During the Great Recession: Crisis Strategies of European Employers

H.P. van Dalen, K. Henkens

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Abstract

Summary 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, the Netherlands and Sweden in 2009, we show that 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 employers who favor younger workers 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 lower-level managers to cut wages.
Original languageEnglish
Place of PublicationTilburg
PublisherDepartment of Economics
Number of pages33
Volume2013-026
Publication statusPublished - 2013

Publication series

NameCentER Discussion Paper
Volume2013-026

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Keywords

  • downsizing
  • early retirement
  • fairness
  • older workers
  • recession

Cite this

van Dalen, H. P., & Henkens, K. (2013). Dilemmas Of Downsizing During the Great Recession: Crisis Strategies of European Employers. (CentER Discussion Paper; Vol. 2013-026). Tilburg: Department of Economics.