What Is Meant By Corporate Downsizing And What Is The Underlying Principle Of Downsizing?

Corporate downsizing some times is referred as restructuring or de-layering,and this is an activity in an organization eliminating certain jobs or employees to create greater efficiency.

Underline principle behind downsizing is to create greater efficiency. Efficiency means with fewer employees get the same amount of output. The idea of downsizing is to reduce number of workers employed by the organization. While the laymen are not immune to layoff so now the downsizing efforts have been on the management ranks.

The organizations now want to have greater number of employees under a manager who can effectively and efficiently direct and manage. If a manager can direct the activities of more employees then the manager is more efficient. This will save cost and reduce response time of manager towards its employees but many issues will rise like

• There will be anger that their friends being dismissed.
• There will be fear among employees that they will be next in downsizing.
• There will be greater job stress by doing the work of several individuals.
And so on.

Downsizing is very difficult, one can layoff a valuable employee and can engage a worthless employee. So this thing needs lots and lots of workout and after that one can decide who to keep and who to layoff.