The last decade has witnessed a sharp decrease of school-aged children in the East-Asia and Pacific regions. In some affected districts in Hong Kong, for example, the insufficient student enrolment has brought to school closure. Teacher job satisfaction and principal leadership approaches have been greatly affected. In response to the situation, the Education Bureau of Hong Kong launched the Voluntary Optimisation of Class Structure Scheme (hereafter the Scheme) to cushion the shock and to lower the risk of secondary school closures. There are 220 schools participate in the Scheme involving around 12,000 principals and teachers. The Scheme has direct implications on the number of class structure and teacher career advancement. The negative impacts of the Scheme on teacher job satisfaction has since been widely discussed. Yet, there has no parallel research attention been given to this situation. This doctoral study is the first of its kind to conduct a systematic investigation into the impact of the Scheme on teacher job satisfaction looking at both the individual and contextual factors. Mixed methods include semi-structured interviews and questionnaire survey were employed. Multiple Regression analyses were performed to examine the impacts of the Scheme on principal leadership and teacher job satisfaction. Additionally, the predictive factors of principal leadership for teacher job satisfaction were determined. Based on the empirical data, this presentation will discuss the obstacles and success factors of the implementation of Scheme for teacher job satisfaction. Recommendations will be made for addressing the problem in terms of principal leadership and policy enactment.