Four years ago, the Colorado education system embarked on a course to downsize central offices in response to calls for accountability and site-based decision making. This paper presents findings of a study that examined restructuring and downsizing in four Colorado school districts. One consequence of downsizing was a reduction in force at the district administrative level. Data were gathered through document analysis and interviews with central-office and school personnel. The study found that school districts chose a variety of strategies in response to pressure to balance their budgets: (1) picking up "loose change"; (2) controlling budgets more tightly; (3) right-sizing the central office while "holding classrooms harmless"; (4) impacting the classrooms; (5) reincorporating necessary areas into the budgets; and (6) transforming central-office roles and functions. District personnel initially experienced short-term euphoria, which was followed by disillusionment, role confusion, burnout, and attempts to cope. To establish best practices, districts should develop a comprehensive and less reactive strategy; consider the human toll; differentiate between centralization and downsizing; and focus on developing a systemic capacity. (Contains 10 references.) (LMI)