Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations

10.1. The Global Context of the New Reality

The old psychological contract was forged in the post-World War II culture, where big was better, relationships were long term, and the United States enjoyed a historically derived competitive advantage. Today we live in a global, technically interlocked economy, and many of the old contract's assumptions and strategies are played out against far different realities. As Friedman (2007) points out, technology has leveled the playing field, and the United States now is but one, albeit a key player, in the world economy.

The global epidemic of layoffs is unfolding within diverse economic and social contexts. In North America, the United Kingdom, and parts of Australasia, despite a significant cultural ...