A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees for business reasons, such as personnel management or downsizing an organization.

What happens when a company downsizes?

Downsizing is the permanent reduction of a company's labor force through the elimination of unproductive workers or divisions. ... Cutting jobs is the fastest way to cut costs, and downsizing an entire store, branch or division also frees assets for sale during corporate reorganizations.

What does it mean for a company to downsize?

Downsizing is when a company terminates a number of employees at the same time. Downsizing occurs for a number of reasons, most often to save money. Termination as a result of downsizing is unique in the sense that the employee is not responsible for their termination.