Human Resources

Gartner Glossary

Downsizing

Downsizing is the process of terminating multiple employees at the same time. There are three major reasons that organizations conduct downsizing:

  1. Cost reduction
  2. Adoption of new technologies that reduce the need for a large number of employee
  3. Relocation of the business (such as moving a factory from one country to another).

Downsizing may occur through the elimination of positions or via organizational restructuring. As opposed to termination for cause, downsizing is typically not due to any misconduct on the part of the employee.

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