In the face of slowing or declining sales, companies often downsize their employee base as a means of cutting costs to boost profitability. Although Downsizing is effective for significant cost reduction, it often produces unintended side effects, such as damaged employee morale, poor public relations, future right-sizing hiring costs and an inability to capitalize quickly on opportunities when the economy improves.
Skillful Downsizing should help a company emerge from challenging economic conditions in stronger shape. Creative efforts to avoid Downsizing include hiring freezes, salary cuts or freezes, shortened work-weeks, restricted overtime hours, unpaid vacations and temporary plant closures.
When Downsizing proves unavoidable, the ultimate goal should be to eliminate nonessential company resources while minimizing the negative impact on the remaining organization.
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