What is Downsizing?

Downsizing :

          In any business organization, there should be adequate staff (employees) as per the need. Excess employees or inadequate employees are undesirable as both the situations are harmful. The term downsizing is used to indicate reduction of excess manpower by suitable measures. Thus, downsizing means reducing the number of employees and adjusting the manpower as per need so that the problem of excess manpower will be solved smoothly/peacefully.

For reduction of excess manpower suitable downsizing plan will be necessary. Where there is surplus work force, trimming of labour force will be necessary. The trimming or downsizing plan prepared for this purpose will indicate :

(1)     Who is to be made redundant and where and when,

(2)     Plans for re-training where this has not been covered in the re-development plan,

(3)     Steps to be taken to help redundant employees find new jobs,

(4)     Policy for declaring redundancies and making redundancy payments, and

(5)     Programme for consulting with unions or staff associations and informing those affected.