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October 5, 2015

The advantages of corporate downsizing

Reviewed By: Jack Griffin, Chairman & CEO, Atlas World Group - 25+ Years in the Moving Industry

  • Corporate relocation
Downsizing is often an inevitable practice for many companies.

While downsizing can be a difficult process for any company, the reality is that it more often than not, downsizing benefits a business in the end. It's a time when companies can step back and analyze which areas they could operate without or what aspects of their business need improvement. It can also relate to many areas, such as relocating offices to accommodate for layoffs or moving to a different building for securing lower maintenance costs. Although downsizing can seem like a daunting idea for many businesses, here are a few advantages this move can provide corporations:

Eliminating costs

One of the more obvious benefits to corporate downsizing is the chance to shave off some of the company's expenses and re-evaluate all the various business costs. This doesn't necessarily mean having to lay off employees. Sometimes, reducing the quantity or quality of equipment a company uses can have a significant impact upon revenue, without having to lose out on productivity. However, this is often an inevitable element to the good of the company's future. If sales are slowly dipping or an economic recession is proving too trying, downsizing is the best, and sometimes only, option available to eliminate costs.

"Corporate downsizing can help provide a sense of clarity for company leaders."

Improve efficiency

Bigger is not always better when it comes to workplace efficiency. Downsizing allows for management to evaluate which positions might be expendable or which company policies could be ineffective. Relating to employees: If there's a position that could be eliminated without having a profound effect upon productivity, then it's probably for the best to part ways with this role. This can also relate to various teams within the organization. Merging groups together can make completing tasks and projects a less complicated procedure and improve workplace communication. These are little elements to downsizing that can eventually result in enhancing organization within the company and do tremendous good in the long run.

Changing location

While most companies believe that upgrading to a new building or a bigger space is a sign of success, switching to a smaller office can be beneficial for a number of reasons. For starters, this can significantly reduce the cost of the lease for a building, which is especially important for businesses located in bigger cities that are trying to reduce expenses. Many times, downsizing the location of a company can result in opening up more funding to other areas of the business, such as improving technology or increasing salaries. Utilizing the services of a professional moving company for relocating to a smaller or cheaper building will allow for a smooth and painless process during this time of downsizing.

Opening opportunities

There can always be casualties of corporate downsizing, especially if layoffs have to be involved. However, these changes can mean bigger improvements for employees who stick around. Downsizing often opens doors for people to start seeing more opportunities for themselves to move up the company ladder and take advantage of new positions or roles that need to be filled. It also provides a chance for workers to begin taking on new projects or responsibilities that can make them more valuable for business and allow them to add certain skills to their repertoire. As one door closes, another one opens during corporate downsizing.

Adapting to changes

One of the more overlooked aspects of corporate downsizing is how this process usually indicates that a company is adapting to changes in its industry. If a position is slowly becoming obsolete within a particular field, there's certainly no point in keeping it on payroll. Even little changes, such as eliminating paper and ink usage or allowing for more freelance roles within the organization, are not only ways to reduce expenses, but are also indications that a company is reflective of the times in which its operating.

Hands-on approaches

For company managers or decision-makers, downsizing is a chance to take it upon themselves to make the right changes for a company as they see fit. Oftentimes, there are so many heads trying to come up with various solutions that the abundance of ideas can get in the way of productivity. Corporate downsizing tends to be an opportunity to create clarity for managers and leaders, which allows for further reflection on what's necessary for maintaining positive results and revenue with the company.