Final answer:
The intentional reduction of a company's workforce to meet current operational needs is known as downsizing. This process can be necessary due to financial goals not being met or during restructuring phases, impacting both those let go and the employees who remain.
Step-by-step explanation:
Intentionally reducing the company's workforce to the point where the number of employees is deemed to be right for the company's current situation is referred to as downsizing. Downsizing involves laying off a significant percentage of the company's employees.
This action can arise from various business needs such as a pronounced failure to achieve profit goals or a strategic restructuring. Industrial-organizational psychologists may assist in this process, addressing how the news is delivered and supporting both laid-off and retained employees. Retained employee's intent to quit, organizational commitment, and job insecurity are important aspects to manage during downsizing events.