Downsizing is often used to soften the blow in the process of firing and being fired, especially in the government employment sector.  Downsizing or doing lay offs is a toxic solution. Used sparingly and with planning downsizing can be an organization life saver.  Downsizing can destroy an organization's effectiveness.  We have to know how we treat people really matters to people who leave and the people who remain.

Make no mistake downsizing is extremely difficult.  It taxes on all management resources, with both business and humanity.  No one looks forward to downsizing. Downsizing began as the strategy of sickly corporations shedding workers in the face of weak demand, but soon, strong firms looking to boost share holder value even adopted the policy.  

Downsizing will be examined as a strategic option that management can exercise in order to boost equity value.  Downsizing will be presented as a macro economic phenomenon, having an impact on inflation, and therefore the rate at which stock prices are discounted and valued.

The extremely difficult decisions of who must be laid off, how much notice they will be given, the amount of severance pay, and how far the company will go to help the laid off employee find another job are given less than adequate attention.

Like culture, "downsizing" is a problem in its usefulness.  Because it is popularly associated with giving people the ax in organizations, it is not a term that many management consultants go out of their way to use.