Downsizing in a learning organization: Are there hidden costs?

Business practice has been at odds with organizational theory: whereas one managerial "fashion"-downsizing-involves divestiture of human assets, anoth er-learning-advocates investment in human assets. We use a social network f rame to consider the impact of downsizing on organizational learning and pr opose that the effects can be viewed as ct nonlinear function of learning n etwork size. From this perspective the potential damage to a firm's learnin g capacity is greater than headcount ratios imply.