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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