downsize

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Downsize

To reduce the size of a company. A company downsizes when its operations are perceived to become inefficient and it wishes to concentrate on certain competencies in order to improve profitability and reduce expenses. Downsizing often reduces the number of jobs at the company. Because downsizing reduces expenses, it often increases the company's value and/or dividends for shareholders.

downsize

To reduce the size of a company, often by eliminating one or more divisions. Management may decide to downsize a firm in order to improve efficiency and to increase the returns to shareholders. Downsizing can cause a firm to grow smaller and more valuable at the same time.
References in periodicals archive ?
It also considers other determinants, which reflect via control variables the influence of corporate characteristics such as size or age, or of economic factors, on the decision to downsize.
As regards age, the results of the present analysis indicate that the older companies were more likely to downsize in Spain from 1994 to 2000, which contrasts with the findings of Suarez and Vicente (2000).
Thus, the explanation of the behavior of those organizations that downsize lies in theft imitation of the behavior of the leading companies in their sector.
The primary implication of this study is that returns to firms that downsize are affected by the characteristics of the firm announcing the action.
This research was limited to investigation of the returns of firms that downsize.
Indeed, the lack of effective planning for corporate downsizing is backed up by AMA surveys: Fewer than half the companies that downsize plan to do so a year in advance.
Companies should be prepared for acts of vandalism, malicious mischief and industrial sabotage following a decision to downsize.