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Why do organizations downsize?

There are several reasons why organizations decide to downsize the workforce. Some of the factors most commonly mentioned include the following:

  • Declining profits
  • Business downturn or increased pressure from competitors
  • Merging with another organization, resulting in duplication of efforts
  • Introduction of new technology
  • The need to reduce operating costs
  • The desire to decrease levels of management
  • Getting rid of employee “deadwood”
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