The threat of loss of jobs impacts creativity adversely.
Why downsizing? Actually any other threat affects creativity adversely. This is where the so called monotonous jobs where the repeatibililty of the process is rewarded and any deviation is punished are affecting the creativity.
If you ask the software developers continuously threatened with consequences of schedule deviation and effort deviation, they will be impacted and minds will start going downhill. have we all seen this - the big IT majors in India may have killed the creativity of the software developers by importing processes that were designed to produce predictable results by machines. The variation reduction mechanisms especially enforced by manufacturing guys on the software development teams are having an adverse impact now, when it is the need - a really urgent need - to increase variation rather than reduce variance.
Further, the variation reduction methods anyway created very less value for even the manufacturing organizations - even there the organizations that focussed on people and their minds are winning - (Toyota Motors)...
Enable human minds to be focussed - in solving problems - thats the only way!