What is the cost cutting approach emphasizing short term results and redundancies
Answers
Answer:
Take education giant Pearson. The publishing company is to cut 4,000 jobs globally, or one in ten of its staff, as a result of the prolonged downturn, though largely across its US markets.
Explanation:
No doubt this kind of cost-reduction strategy stimulates a short-term solution and appeases shareholder demands – evidenced by share prices rising 15% on announcement of the news. But there’s evidence to show it actually creates longer-term issues for companies, continuing to trap them in a downward cycle.
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Redundancy would be the means available to exit employees from an organisation whose positions are declared surplus and redeployment opportunities within the organisation have been exhausted. Redundancies occur during; restructures and reorganisation following a merger or takeover; when business or functions are relocated interstate/overseas and/or when new technology is introduced or as a result of business closures.
Answer:
Workforce reduction. A type of downsizing strategy, using a cost-cutting approach emphasising short-term results and redundancies.