Outsourcing, Spatial Relocation and the Fragmentation of Employment

Abstract

This paper analyses the impact of external restructuring along value chains (including outsourcing, relocation and spatial concentration of activities) on work and employment. Drawing on findings of a European research project covering manufacturing and service industries, the paper highlights the dynamics of value chain reorganisation. Regarding employment consequences, it is argued that external restructuring leads to a fragmentation of employment and work as labour processes are stretched over organisational boundaries and workforces are divided by different employment contracts and terms and conditions. Generally, employment and working conditions worsen downstream in the value chain. However, because of increasing competition within value chains and networks, externalisation often no longer cushions the workforce of core firms against pressures and risks.