downsize

Downsize is a verb meaning to reduce in size, number, or scope; the noun form is downsizing. It can refer to making something physically smaller, narrowing a product line, or cutting the size of an organization.

In business, downsizing denotes deliberate actions to cut costs or improve efficiency by reducing staff, consolidating functions, or discontinuing operations. It may follow a period of growth, a merger, or a strategic shift. The goal is often to lower overhead and increase profitability, though outcomes vary. Common methods include voluntary exit programs, buyouts, attrition, and, when necessary, layoffs. Legal and contractual obligations, severance considerations, and communication with employees are important aspects of the process. Downsizing can affect morale, corporate culture, and the remaining workforce's workload and engagement.

In a personal context, individuals may downsize by moving to a smaller home, reducing possessions, or simplifying a lifestyle to reduce expenses or administrative burden. In product management or manufacturing, downsizing can describe shrinking a product line, reducing packaging, or scaling back production volumes.

Alternative approaches such as right-sizing, organizational redesign, outsourcing, or automation may achieve similar goals without the negative effects sometimes associated with workforce reductions. The term became prominent in the late 20th century as companies pursued leaner operations.