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Managing Through Turbulent Times: The 7 rules of crisis management by Anthony Holmes

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12. Downsizing

There are several euphemisms used to describe the deliberate contraction of the business. Downsizing, rightsizing, restructuring, rationalisation are some of them used frequently.

Whatever name you attach to the process the programme objective is to establish a new balance between revenue, margins and costs.

In most companies the effects of economic turbulence are experienced financially and the instinctive response is to reduce costs and increase margins but not to increase revenues.

Usually, a target cost saving is set and a plan formulated for how the company can be downsized to operate at this lower level of fixed cost.

Before we move to a detailed discussion about downsizing and cost-cutting I want to emphasise something ...

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