Journal Press India^®

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Retrenchment as a turnaround strategy has gained traction. This research intends to determine the impact of the retrenchment strategy on market share in Zimbabwe. Explanatory sequential mixed methods research design supports this study whereby structured questionnaires and semi-structured interviews were employed in data collection. The quantitative results establish that the retrenchment strategy is a statistically insignificant factor to explain organizational performance. To gain an in-depth understanding, the qualitative follow-up ascertains five themes that lead to the ineffectiveness of the retrenchment strategy, namely, high retrenchment costs, poor timing, deviant behavior, stringent labor law, and remuneration gap. The study concludes that the retrenchment strategy is an insignificant factor to explain company performance. Hence, the study recommends the management of struggling manufacturing firms monitor and assess these factors before engaging in the retrenchment of employees so as to retain tacit knowledge. The results of this study are relevant to business practitioners, scholars, policymakers, and researchers.

Keywords

Retrenchment strategy; Corporate turnaround; Human capital; Corporate failure; Social exchange theory

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