DEFINITION of 'Curtailment'

The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations.

BREAKING DOWN 'Curtailment'

A company may use several techniques for curtailing its operations, such as cutting down its workforce or spinning off some operations. This is an effective management technique as it helps to refocus the company on operational efficiencies, which improve shareholder wealth.

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