Restructuring is when a company makes significant changes to its financial or operational structure, typically while under financial duress. Companies may also restructure when preparing for a sale, buyout, merger, change in overall goals, or transfer of ownership.

What happens when a company restructures debt?

The debt restructuring process typically involves getting lenders to agree to reduce the interest rates on loans, extend the dates when the company's liabilities are due to be paid, or both. ... Creditors understand that they would receive even less should the company be forced into bankruptcy or liquidation.

Does restructuring mean layoff?

A "layoff" is an action by an employer to terminate employees for lack of work. ... A "downsizing" simply means releasing employees because the operation no longer needs them; reorganization or restructuring of the institution has eliminated jobs.