Reducing the size of a company by eliminating workers and/or divisions within the company.

It is sometimes referred to as "trimming the fat".


When a company downsizes, it is attempting to find ways to improve efficiency and increase profitability.

  1. Reorganization

    A process designed to revive a financially troubled or bankrupt firm. A reorganization ...
  2. Rationalization

    A reorganization of a company in order to increase its efficiency. This reorganization ...
  3. Restructuring

    A significant modification made to the debt, operations or structure of a company. ...
  4. Severance Pay

    The compensation that an employer provides to an employee who has been laid ...
  5. Outplacement

    Assistance provided through a third-party company and paid for by a former employer ...
  6. Severance Package

    A bundle of pay and benefits offered to an employee upon being laid off from ...
  7. Horizontal Integration

    The acquisition of additional business activities that are at the same level ...
  8. Vertical Integration

    When a company expands its business into areas that are at different points ...
  9. Gray Market

    An unofficial market where securities are traded. Gray (or “grey”) market trading ...
  10. Supply Chain Finance

    A set of technology-based business and financing processes that link the various ...
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Hot Definitions
  1. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  2. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  3. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  4. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  5. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  6. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
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