Question

Why are workers in an organisation retrenched?

Answer 1

1. Surplus Staff: The number of employees exceeds the current requirement. This occurs as a result of overstaffing, a decreased workload, or the overlap of roles.
2. Financial Losses or Cost-Cutting: The organisation may be incurring heavy losses or aiming to reduce operating expenses. Retrenchment helps lower the wage bill.
3. Excess Manpower: When there are more workers than required, retrenchment helps to streamline the workforce and improve efficiency.
4. Technological Changes: The Introduction of automation or new machinery may reduce the need for manual labour.
5. Low Demand or Production: In case of reduced market demand, companies may scale down production, leading to job cuts.
6. Business Restructuring: During mergers, acquisitions, or reorganisations, mergers, acquisitions, or organisational changes may lead to job elimination or department downsizing.
7. Outsourcing: Jobs previously done in-house may be outsourced to third parties. In-house workers are then let go.