Dear Raj,
Retrenchment is an extension of the root word 'retrench'.
By definition, 'Retrench' means
- to cut down, reduce, or diminish; curtail (expenses)
- to economize; reduce expenses.
For example, they retrenched by eliminating half of the workers.
Going from the above, we get to understand that by retrenchment, we mean to say that we are reducing our workforce to enable the company / organisation to be financially viable and healthy. In other words, to be able to function as an entity, it is inevitable that the company / organisation reduce its workforce by 'retrenching' (terminating) some of its employees.
We cannot use the word 'terminate' here because 'terminate' connotes 'bringing to an end' or 'to dismiss from a job; fire an employee', which is not the same as 'retrenchment'.
Hope to have clarified your query.
Warm Regards,
Samba Siva.