Organisations usually decide to downsize or leverage to remain competitive during difficult economic times.  The organisation is tasked to make some difficult decisions in relation to its human assets, such as to cut staff, in order to relieve economic funds in the short term.  While this decision may relieve the organisation financially in the short term, it may open the organisation up to both the short and long term risks such as: 

• Losing valuable skills and knowledge that may have taken years to develop

• Poor company culture due to 'fear of losing jobs'

• Poor company branding in terms of 'employer of choice'

• Decline in quality service levels

• Poor branding negatively impact quality of candidates in recruitment efforts 

Prior to HR downsizing for cost cutting measures, consider other alternatives : see people retention strategies

Downsizing Alternatives

• Consider any tangible wasteful costs/products/services in the organisation you do not need and may sell or shut down

• Diversify your business, dont rely on one product or service

• Streamline your workflow operations to maximise efficiencies and minimise lag

• Improve your customer service and focus on current customer business

• Partner or form alliances with other organisations

• Purchase a profitable business that will boost your core business

• Market and Promote your brand more effectively to increase new customers

• Consider increasing or decreasing business trading hours to increase or decrease costs

• Hire talent with business growth capabilities

• Consider offerering share ownership

• Consider investors