Association of company downsizing with the risk of mental distress among employees in the Norwegian working population

TL;DR

This study finds that company downsizing increases mental distress risk for remaining employees, especially when they are closely affected and lack support.

Contribution

The study introduces a novel analysis of mental distress risk based on proximity to downsizing and quality of communication and support.

Findings

Employees in departments with downsizing had a 1.78 times higher risk of mental distress.

Insufficient involvement, information, and support during downsizing led to a 5.02 times higher risk of mental distress.

Providing sufficient support could reduce mental distress risk among employees affected by downsizing.

Abstract

Studies indicate that downsizing can have a negative influence on the mental health of employees who keep their jobs. This study examines how downsizing impacts the mental health of remaining employees, focusing on their proximity to downsizing and ratings of involvement, information, and support during downsizing. Based on data from three iterations (2013, 2016 and 2019) of a nationwide survey in Norway, we included respondents employed by the same company in two consecutive surveys. We used logistic regression models adjusted for age and sex to calculate odds ratios (ORs) with 95% confidence intervals (95% CIs) for incident mental distress in the second survey among employees without distress in the first survey. Compared to unexposed employees (n = 2,571), the OR (95% CI) for employees exposed to downsizing was 1.57 (1.16 − 2.13) overall (n = 1,300). When differentiating exposed employees by proximity, the ORs were 1.78 (1.26 − 2.49) for those with downsizing in their own department (n = 784) and 1.26 (0.79 − 1.95) for those with downsizing in another department (n = 516), respectively. Furthermore, among employees exposed in their own department, the ORs differed according to their rating of involvement, information, and support during downsizing: 1.27 (0.82 − 1.91) for sufficient (n = 580) and 5.02 (3.03 − 8.04) for insufficient (n = 149). Downsizing was associated with a higher risk of mental distress among employees who kept their job, but the findings also suggest that companies might reduce this risk through employment involvement, information and support to employees affected the most by downsizing.

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