Why Is Rightsizing The Best Option During Corporate Crisis?

Please scholars i need to know why downsizing or rightsizing (decruitment) is seen as the only option during economic and corporate crisis.

Dear Odumni,

When the national or international business environment is unfavourable, the companies start meeting the headwinds. Against this backdrop, there is reduction in business volume. With the reduced business, how to maintain the same strength of the staff? Employees need to be given sufficient work. Companies cannot wait for the better business environment and continue with the same staff strength. Hence the retrenchment of the workers. The euphemism for manpower reduction is "rightsizing".

Rightsizing of the manpower does not just happen because of the low business. When companies embrace new technology or automation, certain people become redundant. They are removed from the job since there is no work that can be given. Technological upgradation has always unleashed wave of redundancy. While it is a big loss to the individual worker who is laid off, it is essential for the company to survive to sustain competition. The companies that do not do rightsizing timely, they put at risk their survival.

If the unwanted cargo is not removed, an overweight ship might sink. Captaincy of the captain of the ship lies in identifying this excess luggage and throw it away. It is for the larger good of those who are on board.

Thanks,

Dinesh Divekar

Dear Odumni,
I would also like to join the discussion by adding something more to what our learned friend Mr.Dinesh has rightly observed.
Economic or Corporate crisis is a formidable phenomenon, mostly external, beyond the control of an individual employer. Such a situation would demand strategic adjustments at least to stay put in stead of getting washed off. Labour, more than necessary in tune with shrinkage of business activity or in terms of technological upgradation automatically becomes an economic dead-weight. So jettisoning becomes inevitable to the employer to save the ship as pointed out by Dinesh. Among all the factors of production or industrial activity including technology, only labour is the most bargainable one. Hence down-sizing or right-sizing is the universal option at times of economic or corporate crisis.