Question

South Carolina is facing budget cuts. The number of employees needs to be reduced over the next three years at all state agencies. The state decides to stop hiring new employees to fill vacated positions to comply with budgetary constraints. This approach is called
a. attrition.
b. natural turnover.
c. layoffs.
d. passive firing.
e. downsizing.

Answer 1

Answer: Downsizing

       

Explanation: In simple words, downsizing refers to the strategy under which the management lay of its workers or departments with the objective of improving its financial performance. In other words, downsizing refers to reducing the scale of business.

In the given case, company is laying off its employees as it has lack of budgets in hand. Such funds would be used for other operations.

Hence from the above can conclude that the correct option is E.