downsizing

Restructuring of an organization, usually involving a significant reduction in workforce. A popular practice during the late 1980s and early 1990s, downsizing was seen as a way to deliver better shareholder value by reducing costs, and was associated with the practice of delayering.

One person strongly associated with the practice of downsizing was US business executive ‘Chainsaw’ Al Dunlap. Management thought has moved away from wholesale downsizing as a recovery strategy although it is still practised. The stigma associated with the term has led to the use of the euphemism rightsizing (see rightsize) instead.