Final answer:
When an organization reduces the size of its operations, it is known as downsizing, which may follow events like mergers or when a company aims to improve efficiency and cut costs.
Step-by-step explanation:
When an organization reduces the size of its existing operations, it is called downsizing. Downsizing is a strategy employed by companies that involve reducing the workforce and restructuring the organization, often in order to cut costs and improve efficiency. This can sometimes happen after events such as mergers and acquisitions, where duplicate departments within combined companies lead to a reduction in staff. Downsizing can have a significant impact on employee morale and often accompanies other strategic changes within a company, including addressing failure to meet profit goals.