Downsizing

Downsizing
For several years now there has been a strong tendency to adopt a downsizing strategy to deal with the economic pressures in the environment. First witnessed in the private sector, this approach has now spread to all levels of government and knows no sectorial or geographical bounds.
Thus, this phenomenon no longer represents one of the many consequences of economic upheaval, but has instead taken on a life of its own (Gosselin, 1994). Once seen as a short-term measure, downsizing has become the way to increase profitability.
For most organizations, labour costs account for a large part of expenditures, and since these organizations generally enjoy a certain amount of latitude in terms of their payroll, they are tempted to cut salaries first to achieve immediate economic benefits.Impact
Of course there are many anticipated benefits of downsizing, in terms of the economic level and increased operational efficiency of the organization. In the current management literature,...