Downsizing or The Permanent Termination of Employees

934 WordsFeb 4, 20184 Pages
Downsizing is the act of reducing the number of employees on payroll, also casually known as “trimming the fat”. A downsize normally occurs during economic downturns and when a company is not raking in desirable profit margins and is aimed to lower operational costs. Downsizing helps businesses to re-evaluate, re-organize, re-engineer, restrict and revamp their operations to steer themselves into a positive direction. Downsizing is referred to by some as “a permanent termination of employees” while a layoff, interpreted as “a temporary downscaling of employees” Layoffs may happen with the intention of re-hiring employees at a later stage when the company is more financially stable. Downsizing brings about layoffs which include other organisation restructuring changes, such as decrement of number of work hours, converting permanent staff to temporary or part-time staff, merging departments, or even pay-cuts. Outsourcing, more commonly known as sub-contracting, is a business process in which a third-party provider is contracted to do a job function instead of managing them in-house. By freeing up resources like time, human capital and money, businesses increase efficiency as outsourcing to a specialist in the respective field will allow companies and businesses to focus on their core activities and continue what they do best to bring the companies to greater heights. It employs cost savings and staffing flexibility techniques by allowing companies to grow their business

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