Downsizing is a strategy for reducing a business portfolio by eliminating products or strategic business units (SBUs) that are no longer profitable or that no longer fit the overall corporate strategy. This process is a form of “harvesting” or “divesting”.
Downsizing is undertaken to free up scarce resources (money, personnel, management time) from unproductive areas and redirect them to more promising SBUs. Although it can be a difficult process, it is necessary to maintain focus and maximize the company’s performance in the long term.
