Exploring the Downside of IT Outsourcing: Outsourcing Tactics, Layoffs, and Organizational Outcomes

The beginning of the new millennium has been characterized by increased outsourcing and off-shoring of IT work. One outcome of this spurge has been massive layoffs of IT workers, with different companies following different approaches to downsizing IT workers. There is very limited empirical research examining layoff approaches accompanying IT outsourcing decisions and resultant organizational outcomes. Addressing this gap, this research study seeks to: (i) understand downsizing approaches accompanying IT outsourcing efforts and propose a conceptual typology for IT personnel layoffs, (ii) identify key factors that determine a firm’s choice of layoff approach while carrying out their IT outsourcing initiatives and, (iii) examine the organizational outcomes that result from IT outsourcing and accompanied IT personnel layoffs. We discuss our conceptual model linking outsourcing, layoff approaches and organizational outcomes and present details of our on-going research project.