Workers who keep their jobs following cuts are almost as likely to need treatment for stress as colleagues made redundant, say researchers.
Could survivor guilt be a factor?
University College London researchers, writing in the Journal of Epidemiology and Community Health, said more help should be offered to "survivors".
They examined records of prescriptions given to Finnish municipal workers after redundancies in the mid-1990s.
Another expert said stress might even be more common among survivors.
The majority of sickness absence in the UK is now due to stress-related illness, and increased work pressure, alongside the threat of redundancy to cut costs and following company mergers has been blamed for some of this.
The UCL team compared evidence of mental health problems such as stress and anxiety in 5,000 workers who remained in post after 'downsizing', comparing them to 4,000 who lost or left their jobs.
They found that men made redundant or who left during downsizing were 64% more likely than those in completely unaffected workplaces to receive prescriptions for drugs such as antidepressants and sleeping pills.
However, their former colleagues still working were not far behind, with men having a 50% increased chance of being prescribed such drugs.
In women the effect was much smaller, with no increase in the chance of prescriptions following redundancy, but a slight increase in women who held onto their jobs in a downsized unit.
Men were more likely to receive antidepressants, women more likely to get drugs to counter anxiety.
The researchers said that it was clear that downsizing could increase the workload and reduce job security of those who stay in their jobs.
They said: "Policy makers, employers, and occupational health professionals should recognise that organisational downsizing may pose mental health risks among employees."
They suggested that the reason for the difference between male and female responses might be partly due to cultural differences around how the importance of work was perceived.
Professor Cary Cooper, who carries out research into organisational psychology at the University of Lancaster, said that "survivor guilt" affected those left behind.
He said: "Some of the coping strategies that people use when they feel at risk of redundancy can actually add to the problem.
"They'll often go to more waste-of-time meetings, try to take part in the politics, to protect their job.
"But this is called 'presenteeism', and can actually have the effect of making them more stressed - and worse at their core job, making them more vulnerable to redundancy in the future."
He added: "The trouble is that employees don't tend to believe their employer when they're told there is no risk of further redundancies - managers need to try to increase their credibility by being completely honest and transparent in the first place."