Organizational downsizing has been a popular business strategy widely used by enterprises all over the world since the 80¡¦s. Unfortunately, according to the findings of many investigations and researches, the results of downsizing are both positive and negative. Not only the improvements of firms¡¦ performance can¡¦t be ensured, it also brings the devastated consequences to employees. They eventually create chaos to the employees¡¦ families and to the entire society. In order to solve this important issue of the societies, this research reviewed the relative literatures across different research fields, such as organization change, strategy and strategic human resource management field. It found that firm¡¦s dynamic strategy capability and strategic human resource management practices, asserted by strategy and strategic human resource management field as the essential mechanisms for ensuring firm¡¦s competitive advantage, are the two key interventional variables between downsizing strategies and post-downsizing firm performance. Therefore, 110 MNCs and local Taiwanese companies were chosen as the samples to empirically prove the relationships among these variables. The insights and findings in this research may contribute to the theory development in organization change, strategy and strategic human resource management field and to the managerial practice as well.