We explore organizational forgetting, the notion that firms’ knowledge can be lost through human capital decay.  An in-depth case study research, which is guided by the conceptualization of a system dynamics model, is conducted.  The evidence appears to support the presence of forgetting.  This gives rise to the possibility of productivity falling in spite of continued output accumulation, due to changes in the characteristics of the resource where experience resides.  Most prior research on learning curves, however, assumes that productivity will always increase with cumulative firm output.