Downsizing is the practice of reducing the size of a companys workforce or operations to cut costs and improve efficiency. It is the permanent reduction of a companys labor force through the elimination of unproductive workers or divisions. Downsizing is usually associated with economic downturns and failing businesses, but it can also be used to create leaner and more efficient businesses. The process of downsizing involves terminating multiple employees at the same time, and it may occur through the elimination of positions or via organizational restructuring. Downsizing is not always involuntary, and it can also be carried out to align the firms skill and talent with the broader market. Downsizing brings a variety of benefits to businesses, but it can sometimes cause more harm than good. It can harm the business’s public image and reduce local goodwill, so it is something that businesses need to do the right way and at the right time.