Few observers would dispute the fact that radical changes have been attempted in the funding and organization of public services in most developed countries. Increasingly the trend is said to be away from ‘outmoded traditional ways of organizing and conducting public business towards up-to-date, state-of-the-art methods and styles’. Such change is thought to have had implications for employment relations. The aim of this article is to present a critical overview of recent debates about the nature and consequences of public sector restructuring. It first describes some of the main characteristics of public service organizations and how these have been largely embedded in national-level institutions and policy traditions. Furthermore, this article analyses the forces that have driven restructuring and looks at how change has been associated with attempts to reshape public services through privatization and management reform.