Enterprise Downsizing in Norway

Abstract

The fall in oil prices has led to a number of workforce reductions in the oil industry and oil-related industries. This commentary sheds light on the downsizing strategies used by Norwegian enterprises and the factors, if any that limit workforce reductions. The analysis is based on a survey of downsizing among Norges Bank’s regional network contacts conducted in April and May 2016. Most workforce reductions reported by contacts were achieved through redundancies and natural attrition, while severance packages and early retirement were less common. The most important factor limiting workforce reductions reported by contacts experiencing a contraction in output is the need for minimum staffing levels.