Downsizing: Personnel Reductions at the Swedish Tobacco Monopoly, 1915-1939

Sammanfattning: Downsizing is a phenomenon that remarkably seldom has been the subject of historical inquiry. This study investigates how a state-owned enterprise, the Swedish Tobacco Monopoly, reduced its labour inputs because of changed consumer preferences and mechanization in the 1920s and 1930s. By combining qualitative and quantitative evidence, the study addresses questions about the ways of achieving reductions, categorization of workers and decision-making. It is shown that most of the reduction was achieved by reducing the number of workers. Attrition, early retirements and buyouts accounted for about half of the reduction and layoffs for the other half. The management initially made cuts at both ends of the age distribution, but with the advent of mechanization, downsizing measures became more focused on older workers and the principle ‘last in, first out’ was abandoned in favour of a more need-based approach to layoffs. This policy shift was associated with an increased inclination of the management to involve the union in establishing the order of selection, which was a dilemma for the union leaders. Gender was an important aspect of the downsizing process. Women were in the majority in the Swedish tobacco industry, but male workers had a strong position in the union. Tensions between union members of different sex arose after the management had been persuaded to substitute male for female workers in 1927. Although downsizing involved delicate trade-offs for the company as well as the union, both organizations eventually managed to overcome the challenges. The Swedish Tobacco Monopoly is an example of a state-owned enterprise that was able to shed labour and take advantage of new technology.