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Downsizing: Threat or Opportunity

Downsizing is the process of reducing a company's workforce through employee layoffs in order to cut expenses and make the organization more efficient. While downsizing can lower labor costs and streamline departments, it often results in the loss of critical knowledge within the company and decreased employee morale as workers face significant changes and job losses. When downsizing, companies must carefully consider how to implement layoffs, provide severance packages, assist laid-off employees, and support remaining workers during this difficult transition.

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Navin Chandrasekaran
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113 views7 pages

Downsizing: Threat or Opportunity

Downsizing is the process of reducing a company's workforce through employee layoffs in order to cut expenses and make the organization more efficient. While downsizing can lower labor costs and streamline departments, it often results in the loss of critical knowledge within the company and decreased employee morale as workers face significant changes and job losses. When downsizing, companies must carefully consider how to implement layoffs, provide severance packages, assist laid-off employees, and support remaining workers during this difficult transition.

Uploaded by

Navin Chandrasekaran
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Downsizing

Threat or Opportunity

Definition
Downsizing is the management procedure, which reduces the number of employees in a specific company.

Introduction
The organizations apply downsizing techniques by cutting down the expenses and increasing employee layoffs.

Downsizing - Important
Make no mistake: downsizing is extremely difficult. It demands all of a management team's resources. No one looks forward to downsizing.

Main Advantages
There are some advantages when applying the downsizing:
Decrease of the labor costs. Department reengineering. Expenses reduction.

Downsides
Companies can lose critical knowledge they didn't know they had. Employees are feeling the stress of the enormous changes in the company. Corporate downsizing is bad for society as a whole. High labor cost (firing people). Decrease company morale.

Applying Downsizing
There are many factors that involves the downsizing:
How much notice they will be given. The amount of severance pay. How far the company will go to help the laid-off employee find another job. How to deal with the remaining employees.

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