HR Glossary


What is Downsizing?

Downsizing is the process of reducing the number of employees in a company by laying off workers or through other means. Downsizing can be a difficult process for employees who are let go, but it can also be necessary for a company to remain competitive and profitable. Downsizing can be used to improve a company’s financial position, to make the company more efficient, or to reduce costs.

Why do companies Downsize?

Downsizing is often used as a means of cutting costs and increasing efficiency in a company. When a company downsizes, it eliminates positions in order to reduce the number of employees. This can be done in a number of ways, such as through layoffs, early retirement, or buyouts. Downsizing can also involve the sale of divisions or the closure of plants. Downsizing can be a difficult process for employees, who may lose their jobs, their benefits, and their sense of security. However, it can be a necessary step for a company that is struggling financially. Downsizing can help a company improve its financial position by reducing its costs and becoming more efficient. It can also help a company become more competitive by allowing it to focus on its core businesses.


Stay one step ahead.

Be the first to hear about tips, tricks and data-driven best practices for HR professionals.