HR Glossary


Updated on:
August 22, 2022


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Table of Content

What is Rightsizing?

The Rightsizing is that a company decides to cut its workforce to reduce costs and reduce overhead by re-examining its workload and determining which roles are unnecessary. 

The company may lay off employees, eliminate positions, outsource certain tasks, or reorganize work groups.

It is the process of restructuring a company in order to make it more profitable and efficient is known as rightsizing. This usually involves reducing the workforce, reorganizing upper management, cutting costs, and changing job roles.

What is the difference between rightsizing and downsizing?

Rightsizing and downsizing are two different methods used by companies to reduce their workforce.

Rightsizing: Rightsizing is a strategy in which a company gets rid of vacant, unused or underutilized positions. Rightsizing may be done in response to economic growth, increased earnings or decreased expenses. Rightsizing helps a company achieve its goal by reducing the size of its staff.

Downsizing: Downsizing is the process of eliminating positions, regardless of their utilization. Downsizing can be the result of layoffs, increased profits, decreased expenses, or a lack of growth.

Downsizing is often drastic, outgoing, and risky.


What is the steps in rightsizing?

  1. Handling constructional diagnosis 
  2. Identify important roles 
  3. Make Change and modify needs 


Why does rightsizing is necessary in organizations?

Rightsizing is often necessary in order to maintain a healthy and balanced budget. When an organization experiences financial difficulties, rightsizing can be a way to help get the organization back on track. Additionally, when an organization is undergoing a change in direction, rightsizing can help to ensure that the organization is best positioned to achieve its new goals.