Question

Define 'retrenching'

+Reducing costs or spending in response to economic difficulty.
+Making (a company or organization) smaller by eliminating staff positions
+A period during which someone does not take part in an activity

Answer 1

Retrenching refers to the practice where companies reduce costs and spending, often by cutting jobs, to cope with economic difficulties. It's a common response during recessions and depressions to mitigate financial troubles. The strategy can also involve pay cuts and lowering operating expenses.

Step-by-step explanation:

Retrenching is a business strategy used to address economic challenges by reducing costs, which often includes cutting jobs and streamlining operations. During recessions or depressions, companies face decreased demand for their products or services, leading to a slowdown in production. This slowdown usually results in the painful process of having to lay off workers, which imposes significant financial and personal costs not only on the employees but also on their extended families.

Companies may also resort to this strategy as part of a larger restructuring plan, perhaps in preparation to move operations to countries with lower operating costs or to replace full-time, salaried employees with lower-wage, hourly workers. Retrenching is not always only about reducing the workforce; sometimes companies need to reduce spending in other ways, like cutting operating expenses or asking remaining employees to take pay cuts.