Corporate Downsizing

Big Companies fall. How do rich get richer? By discarding you ("Downsizing Haikus"). While this comical haiku on downsizing represents the pessimism among many workers who have fallen victim to this practice, it indeed has some truth to it. Downsizing is the planned elimination of positions or jobs (Gowing, 55). You might even say downsizing, which is often called rightsizing in an attempt to euphemize the word, is the opposite of a company expanding. Many types of corporations and businesses have used or will use downsizing to achieve different goals. In the United States forty three million jobs were erased between 1979 and 1995, according to a New York Times analysis of Labor department statistics. Clearly this is a significant part of the work force.

What had changed in the workforce to resort to downsizing? Many factors have affected the work and organizational structure called for in business. Globalization, consolidations, computerization, and divestment have resulted in dramatic changes in employment (Kirschner). All of these have created a new workforce, a new attitude about employment, as well as reducing job security and morale. The increase in global business has increased competition in most industries. Also, the increasing rate of technology has allowed for a higher production and global business to run more smoothly. It is often difficult for industry to keep up with the large abundance of technology that is introduced to our society every month and year. The shift of businesses from making a product to providing a service has led to downsizing and reengineering of many companies. Companies downsize in an attempt to help the company financially and in hopes of producing larger revenues. In many cases less people working leads to a more efficient and productive workplace. The workers left become more efficient in speed, quality, as well as the reduced use of company resources. Although this is not always the case, many managers and CEO's believe in fact this will be the result of downsizing their firm.