“Due to the recent slump in overall business, many organizations are considering to downsize their operations in order to minimize their losses and save themselves from further losses in future. However, the top management of any company must consider the consequences of shutting down its several operations and lying off employees, on the employee moral and the motivation to work among employees. Companies not only downsize at the time of recession but they usually lay off employees for several others reasons as well. It is usually claimed that downsizing is done in order to quickly improve profits, a company in trouble identifies its largest expenses, which is in most of the cases payroll and starts laying off. The reasons mostly used as a basis for downsizing by companies are organizational restructuring, a slump in business and business process reengineering.’