Downsizing

This refers to the business strategy of cutting back activity.

Downsizing, like retrenchment, typically involves laying off employees, shutting down premises and cutting costs and production. It is usually a reaction to reduction in demand, either as a result of recession or of competitor activity. It can be used to re-focus an organisation on its core strengths or core markets, particularly if the organisation has previously grown in a rapid or uncontrolled way.

Downsizing is a term normally found in strategic and financial management. Explore our learning zone to discover more