Downsizing or The Permanent Termination of Employees

Downsizing is the act of reducing the number of employees on payroll, also casually known as â€Å"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 â€Å"a permanent termination of employees† while a layoff, interpreted as â€Å"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 businessShow MoreRelatedDownsizing1038 Words   |  5 PagesDownsizing occurs when a company permanently reduces its workforce. Corporate downsizing is often the result of poor economic conditions or the company’s need to cut jobs in order to lower costs or maintain profitability. Downsizing may occur when one company merges with another, a product or service is cut, or the economy falters. Downsizing also occurs when employers want to â€Å"streamline† a company – this refers to corporate restructuring in order to increase profit and maximize efficiency. DownsizingRead MoreDownsize In The Workplace Case Study1346 Words   |  6 Pages  You must develop a plan to downsize 15% of your employee population. Identify the steps you must take.   Ã‚  Ã‚  Ã‚  Ã‚  The first step to take in planning for a downsize in an organization is letting all temporary employees go and then move on to the regular part-time employees. This is the logical and fair way to handle inevitable layoffs. It is unfortunate for the individuals affected, however, this I the most reasonable way to handle this issue. Next step would be to ask for any volunteers and adviseRead MoreNotes On Human Resource Management3007 Words   |  13 PagesSubmitted by: Submitted to: Andrea Sloan Final Report of Holden â€Æ' EXECTIVE SUMMARY Table of Contents 1. Introduction 4 2. Layoff planning of Holden 4 2.1Downsizing 5 2.2 Alternatives to downsizing 5 2.3 Limitations 5 2.4 Benefits of downsizing for Holden 6 3. Performance management system in Holden 6 3.1 Set and regularly revise HOLDEN Directives 7 3.2 Translate Holden Directives to Goals throughout organization 7 3.3 Performance appraisalRead MoreEmployees Layoff : Employees1768 Words   |  8 PagesIntroduction Senior managers are often faced with situations where they have to take decisions regarding termination and layoff of an employee, on the basis of several reasons. Layoffs are throbbing for employees as well as employers. If it is essential for the company to conduct layoffs, the managers should conduct them in a way that they impose minimum negative effect on the employee and the organization. In such circumstances, it is also critical to boosting the motivation level and moraleRead MoreDownsizing7053 Words   |  29 Pagesg Downsizing: Layoffs/Closings [pic] | | | | |Top of Form | |[pic][pic][pic] | |Bottom of Form Read MoreOrganization Restructuring2396 Words   |  10 PagesPAGEREF _Toc331191871 h 4 HYPERLINK l _Toc331191872 The importance of restructuring organizations PAGEREF _Toc331191872 h 5 HYPERLINK l _Toc331191873 Steps in restructuring organizations PAGEREF _Toc331191873 h 7 HYPERLINK l _Toc331191874 Downsizing PAGEREF _Toc331191874 h 7 HYPERLINK l _Toc331191875 Reengineering PAGEREF _Toc331191875 h 8 HYPERLINK l _Toc331191876 Process of reengineering PAGEREF _Toc331191876 h 9 HYPERLINK l _Toc331191877 Contingencies Influencing Structural DesignRead MoreEssay about Organizational Culture6678 Words   |  27 PagesDownsizing And Organizational Culture Thomas A. Hickok -------------------------------------------------------------------------------- Abstract In this article Hickok argues that, ultimately, the most prominent effects of downsizing will be in relation to culture change, not in relation to saved costs or short-term productivity gains. In particular, the author notes three observations in relation to the impact of downsizing on organizational culture. First, it clearly appears that powerRead MoreA Brief Note On The Global Nursing Shortage Essay1551 Words   |  7 Pagesmovement within and across organizational boundaries, as well as by a variety of cognitive activities that preceded leaving. Turnover intention refers to employees thoughts of quitting their present job. Employees may choose to withdraw either physically or psychologically. One physical form of withdrawal is to quit the job. However not all employees, are likely to quit. The possible short term option for those with less job mobility is psychological withdrawal, such as thinking about quitting (RamRead More Downsizing And Reengineering The American Public And Private Sector3052 Words   |  13 PagesDownsizing And Reengineering The American Public And Private Sector Wheels of Industry Over the past decade, more and more American organizations are downsizing and reengineering as a means of eliminating excesses in corporate staffing, bureaucracy, and expenditures. This is true today whether it’s a for-profit company or not-for-profit company. Constant change is a new way of life as companies strive to meet customers needs and the ability to successfully innovate, time after time to achieveRead MoreThe Business Environment Of Cities1777 Words   |  8 Pagescountries. Another important reason for Detroi’s decline is the downsizing. â€Å"In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff, with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired† (Tech target, 2015). Downsizing is nothing but the termination of employees before they actually retire. It is used as a strategy by big