Question

Discuss potential problems with downsizing as an organization’s first response to a need to cut labor costs.

Answer 1

Since you have placed this in the business area, I accept that you are getting some information about the business reasons (instead of reasons having to do with society in general) that cutting back can be a poorly conceived notion. Here are a portion of the explanations behind this.

- Resolve. At the point when an organization starts to lay specialists off, different laborers may begin to lose their spirit. They may stress that they will be the close to be cut. As they stress, they may turn out to be less profitable.

- Powerlessness to bounce back. Frequently, the sorts of financial issues that can prompt scaling back can be trailed by a bounce back. At the point when the bounce back occurs, requests may begin to flood in. In the event that the firm scales back, it might get itself unfit to modify when business gets once more.

- Client assistance. On the off chance that a firm lays off countless individuals, it can make it less speaking to clients. It is conceivable that the quality or speed of creation will drop, making clients miserable. A decrease in staff whose activity is to communicate with clients may lessen client bliss too.

For reasons like these, it isn't insightful to reflexively scale down in difficult occasions without cautiously thinking about whether there are choices.