In a business enterprise, downsizing is the reducing of the number of employees on the operating payroll.
Downsizing also distinguished from a layoff, where downsizing is the permanent downscaling of employees and
a layoff is the temporary downscaling of employees where they can be rehired.
An example of a company that has undergone downsizing is MCI. Last June of 2004, the company has eliminated
2,000 U.S. sales jobs as part of a cost-cutting effort in the face of increasing competition, declining revenue and greater
reliance by consumers on e-mail. After the latest series of job cuts, the MCI workforce has dropped to 40,000 from its
its 56,000 workforce.
The MCI spokesman Peter Lucht said that the layoffs were necessary because of "realities in the telecommunications
marketplace, including federal legislation that has resulted in 62 million people joining the 'Do Not Call' list . . .
and increasing use of e-mail."
Downsizing also distinguished from a layoff, where downsizing is the permanent downscaling of employees and
a layoff is the temporary downscaling of employees where they can be rehired.
An example of a company that has undergone downsizing is MCI. Last June of 2004, the company has eliminated
2,000 U.S. sales jobs as part of a cost-cutting effort in the face of increasing competition, declining revenue and greater
reliance by consumers on e-mail. After the latest series of job cuts, the MCI workforce has dropped to 40,000 from its
its 56,000 workforce.
The MCI spokesman Peter Lucht said that the layoffs were necessary because of "realities in the telecommunications
marketplace, including federal legislation that has resulted in 62 million people joining the 'Do Not Call' list . . .
and increasing use of e-mail."
MCI announced job cuts of 1,700 in January; 4,000 in March; and 7,500 in May. The company said in May that it lost $388
million during the first quarter of this year, compared with a profit of $52 million in the first quarter of 2003. MCI reported
revenue of $6.3 billion in the first quarter, compared with $7.2 billion in the first quarter last year, a 12.5 percent decline.
The cause of the downsizing was the increasing competition, declining revenue and greater reliance by consumers on e-mail.
The downsizing was also not surprising because other local phone companies are being very aggressive in taking significant
market share away from MCI and AT&T. - F. Drake Johnstone
online sources:
www.WhatIs.com
http://whatis.techtarget.com/definition/0,,sid9_gci759501,00.html
http://www.washingtonpost.com/wp-dyn/articles/A6672-2004Jun25.html
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