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The research was aimed to analize and explain the effect of downsizing on transformational leadership, organizational climate, organizational commitment and employee performance; transformational leadership on organizational climate, organizational commitment and employee performance; organizational climate on organizational commitment and employee performance; organizational commitment on employee performance of PT. Pindad (Persero). The research type is an explanatory research, which describes the influence among the research variables. The object of research units of PT. Pindad (Persero). The research population was the employees of PT. Pindad (Persero) who have experienced downsizing. The research sampling were 96 people. The research considers the Generalized Structured Component Analysis (GSCA) method to analize the data. The result indicated that there were effects among variables in all hypotheses. Five of 10 hypotheses proposed were significant and 5 other hypotheses were unsignificant. Transformational leadership variable played an important role in effect of downsizing on other variables such as organizational climate, organizational commitment and employee performance. The result of research showed that downsizing through transformational leadership had positif and significant effect to organizational climate and organizational commitment. The other side the effect to employee performance was positif but unsignificant. The research then concluded that the optimization of downsizing must involve transformational leadership as a mediator.

The Effect of Downsizing on Transformational Leadership, Organizational Climate, Organizational Commitment and Employee Performance