Downsizing - a Long-term Solution?

Downsizing is an often used method for a company to increase profits or react to a deteriorating financial situation. If a company is faced with a major decline in business and bankruptcy is being discussed, this may save the company. If a company is just looking for ways to lower operating costs, downsizing will immediately lower the costs of human capital but could set off an unanticipated downward spiral. The corporate leaders need to think about the potential long-term consequences of doing this, particularly if the firm is doing well financially. There are public relations consequences to consider. Do they want to appear greedy and mean-spirited?  Will downsizing set off an exodus of highly-skilled and valuable workers who fear they are next to lose their jobs?   Will customers be afraid to buy a product for fear of not being able to purchase parts and go to a competitor?  A business consulting company like ZG Worldwide can assist in such decision-making by doing a thorough analysis of the situation and providing other alternatives to make the company more efficient.