Downsizing

Scaling-down the number of personnel in a company or commercial operation.

Downsizing has been a well-accepted and politically-sanctioned measure for economic restructuring during the 1990s. In 1997, the automobile manufacturing company, Renault, announced its plans to close its Vilvoorde plant in Belgium in the interests of reducing its European workforce due to more efficient production. The decision seemed to occur at just the time when the pendulum of political fashion began to swing the other way in Europe. The wisdom of the decision was roundly challenged at all levels, with people demanding new policies or alternative strategies.

The private sector should handle economic change in a human fashion. If companies cannot generate more jobs internally, or even indirectly through their suppliers, why not work with governments and local authorities to help create jobs in the voluntary sector. Not only would this be socially responsible, it would also make sound economic sense.

Downsizing might possibly be excusable if it were successful. But a 1992 survey of 1,204 companies showed that this is not the case. Corporate downsizing has a lot in common with dieting: nearly everyone does it, but few get the desired results. Three out of four companies slimmed down their staffs in the last five years, but the majority saw little improvement in either business or productivity.