Share
Explore BrainMass

Reasons for Downsizing and Alternatives

The original student posting:

Downsizing is a topic that is probably close to many of us. In today's challenging economy it is common for companies, large and small, to downsize their workforce in order to stay afloat. Companies often feel that downsizing is the only way to save the business.
For what reasons do companies downsize?
What are some alternatives to downsizing that offer less of an impact for the employee?

Solution Preview

Companies downsize often as a means of swift reduction in operating expenses. Employees may be a valuable resource in making of a product or providing a service, but there are significant expenses involved aside from compensation: payroll taxes, insurance to cover work-related injuries, insurance to cover employees driving organizational vehicles or operating machinery - and benefits can be a huge expense. When finances become an issue, downsizing can dramatically cut all these costs by eliminating positions. Some organizations would rather pay a smaller portion of employees overtime, rather than have a larger workforce working "regular" hours. The rationale in doing so is that although overtime comes at price, it is often less than paying all the insurance ...

Solution Summary

This solution is about 400 words and includes a reference, thoroughly addressing the common reasons an organization downsizes (such as economic factors) and possible alternatives to reducing a workforce.

$2.19