Answer to Question #204662 in Management for Siyamthanda

Question

Assume you will be using temporary employees or workers to cover for decline in capacity output since one of the 15 employees successfully resigned as of 30 June 2021.

Answer 1

Downsizing is the permanent reduction of a company's labor force through the elimination of unproductive workers or divisions. Downsizing is a common organizational practice, usually associated with economic downturns and failing businesses. Cutting jobs is the fastest way to cost reduction, and downsizing an entire store, branch or division also frees assets for sale during corporate reshuffle.

To minimize the damaging effect on morale and productivity you need to come up with an auspicious downsizing strategy. Your strategy should include various points, such as reasons, positions affected, selection criteria, employee benefits, notification, outplacement, and communication.While it is generally implemented during times of stress and a decline in revenues, downsizing can also be used to create leaner and more efficient businesses. Downsizing is not always positive and can have an adverse long-term impact on a company's bottom line