In this article, we explore whether and why shrinking employment in the work organization leads to an experience of imbalance between efforts and rewards at work. We use data-sets from employers and from employees in the Dutch public and education sectors. Results show that shrinking employment indeed is associated with the experience of imbalance between efforts and rewards at work. Imbalance is negatively associated with health and work satisfaction. The association between shrinking employment and imbalance is less strong for risk prone employees.