 | From the Editor's Desk
If You Think Downsizing Might Save Your Company, Think Again Firms often downsize because it is seen as a way to reduce costs, adjust structures, and create leaner, more efficient workplaces. But new research indicates that downsizing may actually increase the likelihood of bankruptcy. The research teamexamined 2010 data from 4,710 publicly traded firms and determined whether they declared bankruptcy in the subsequent 5-year period. After controlling for known potential drivers of both downsizing and bankruptcy, as well as numerous other factors, they found that downsizing firms were twice as likely to declare bankruptcy as firms that did not downsize.
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