Abstract
Purpose:
This paper investigates the effectiveness of the downsizing strategy when applied to the Telefónica case.
Design/methodology/approach:
By using the Event Study method, we present the relationship between downsizing strategies and results. Statistical significance of results was analyzed using t-statistics analysis.
Findings:
Results are significant, proving that the downsizing strategy brought about greater profitability and better funding, leveraging company market values.
Originality/value:
Results indicate that downsizing is a strategy alternative that allows for better adaptation, if carried out proactively and associated to changes that are necessary within organizational structure and processes.
Keywords:
Downsizing; event study; strategy; Telefónica