Asghar Moshabak - Department of management, Tarbiat Modares Universit )TMU), tehran, iran
Fatemeh Mollaei - M.A Student in Business Management, Tarbiat Modares University, tehran, iran
Mohammad moradi - M.A Student in Business Management, Tarbiat Modares University, tehran, iran

Downsizing in organizations is a popular management strategy. However, in the field of organization change, the question of whether downsizing practices eventually improve performance is frequently asked and is never satisfactorily answered. The aim of this paper is to review current literature on downsizing and to identify how downsizing can impact organizational performance. For this purpose, we explored downsizing influences on two groups of organizational factor, the fist is financial factors including cost, productivity and quality improvement and the second group is managerial factors including communication, decision making, innovation and creativity and bureaucracy. The results suggest that downsizing reduces labor costs per employee but it may not be a way for managers to increase performance and couldn’t always be the appropriate strategy for improving firm performance, hence effectiveness of downsizing strategy in the face of an economic downturn for improving performance, requires a multidimensional perspective and depends on the way this strategy is implemented.

downsizing, organizational performance, performance dimensions