Downsizing and Employer Branding: Is there a Relationship?

Abstract

Workforce downsizing has become an everyday fact of working life as most firms struggle to cut costs and adapt to changing market demands in order to survive in the new competitive arena. Extant research has made good progress in better understanding the different issues surrounding downsizing. However, there are still several key issues that have largely been ignored by prior research. One of these issues involves the potential effect downsizing may have on employer branding. This chapter is a preliminary attempt to explore whether there is some kind of relationship between both phenomena. More specifically, the main purpose is to examine how a significant and intentional reduction in the workforce may influence employer branding; while the other way around, an attempt is made to discover whether employer branding practices help to mitigate the negative effects of post-downsizing in the workplace, as well as improve the quality of future recruitment processes. The research setting consists of a small sample of large companies listed in the Merco Talent Ranking in Spain over the period 2007-2017. The results obtained in our study following a preliminary descriptive analysis seem to provide support for the notion that both practices may be closely interrelated in a circular way.