Downsizing

Contents 1. What is Downsizing? 4. Downsizing in TATA Steel 3. Downsizing Strategies 5. Alternatives to Downsizing 6. Downsizing Effects 2. Why do Companies Downsize

What is Downsizing? ,[object Object],[object Object]

Downsizing ,[object Object],[object Object],[object Object],[object Object],[object Object]

Downsizing Strategies 1 Workforce Reduction -early retirement -transfers -outplacement -buy-out packages -attrition -lay-offs 2 Organizational Redesign -eliminate functions -cut hierarchical levels -drop divisions or products -consolidate or merge units -reduce work hours -lengthen shifts

TATA Steel ,[object Object],[object Object],[object Object],[object Object]

TATA Steel ,[object Object],[object Object]

Alternatives to Downsizing ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Downsizing Effects: Overall Mixed effects on firm performance: some short-term costs savings, but long-term profitability & valuation not strongly affected. Firm’s reputation as a good employer suffers. Example: Apple Computer’s reputation as good employer declined after several layoffs in 1990s. ,[object Object],[object Object],[object Object],[object Object]

Downsizing

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