HR Glossary

Downsizing

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Downsizing definition

Downsizing, sometimes referred to as layoff, is the process of company’s permanent reducing of workforce by terminating the employment of employees.

what-is-downsizing

Downsizing definition

Downsizing, sometimes referred to as layoff, is the process of company’s permanent reducing of workforce by terminating the employment of employees. It generally occurs in recession to cut costs or yearly in order to maintain a competitive and efficient work force.

Employees who leave are often compensated by paying a fixed amount or a few months salary. Downsizing affects both the employees who are leaving and the remaining employees who may fear themselves to be in a similar situation at a later time.

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