For more than 20 years, Ranjeet Reddy Paladugu has been working as an entrepreneur and senior-level executive. The founder and CEO of Specialty Holdings, he is the former vice president of finance at L'Oreal and the director of finance at Redken. In these positions, Ranjeet Reddy Paladugu gained first-hand experience in maintaining profitability when downsizing.
Corporate downsizing is the permanent reduction of a company’s workforce by eliminating divisions or employees. Doing so helps the company save money and may boost productivity and efficiency.
Economic downturns are common reasons for corporate downsizing since they often result in loss of profitability. To maintain profitability, companies subsequently cut the jobs of employees who are not vital to business operations.
Another common reason for corporate downsizing is the merging of companies or a change in management. When companies merge, certain employees may become redundant. When management changes, the new leaders may implement procedures and working methods that also render some employees redundant. In both situations, the redundant employees are laid off if they do not leave voluntarily.
