Difference between Downsizing and Reengineering with real life example

Explain difference between Downsizing and Re-engineering with real life example?

Downsizing =

Downsizing is used to reduce the size in order to improve its financial performance, usually by laying off employees.Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.

Downsizing often takes place as part of a larger restructuring program at a company. Although it's usually thought of as a strategy companies use to become smaller, downsizing can also be the result of company mergers, acquisitions, and takeovers.Its most common form comes in employee layoffs, which reduce payroll costs for the company. Downsizing may also involve shuttering some operations or offering certain employees early retirement.

Downsizing is typically seen during economic downturns in order to improve efficiency and maintain profitability. However, if too many companies cut payrolls, it can further the downturn due to higher unemployment.

Examples are following:

HSBC Holdings=

According to the Business Insider website, HSBC Holdings, an international banking and financial services concern, laid off 5,000 people in 2011.

Mobilink= 

Downsizing in Mobilink had happened in a way that was never seen before in company’s history. Employees were stunned and shocked the way they were terminated. There were reportedly total 60 employees in hit list which include one director and few managers and specialists and associates. This downsizing was happened in October 2009.

PIA =

The federal government has decided to lay off ‘extra’ employees of Pakistan International Airlines (PIA) and is going to introduce a voluntary handshake plan for them. These employees were laid off in June 2014.

Re-engineering =

Re-engineering of an organization is the process of improvement of an organization.. The goals of re-engineering include increased company profits, improved competitive advantage in the marketplace and enhanced public image. Re-engineering requires an organization to look closely at its strengths and weaknesses, ask difficult questions where necessary and make changes for the better of the organization.

Features of re-engineering an organization include several important elements. For one, re-engineering cannot proceed without the full support of a company’s upper management. With management’s approval, those responsible for re-engineering must develop a clear plan of review and a vision for what the results will yield. Re-engineering an organization offers a number of benefits for overall productivity. The re-engineering process identifies elements of an organization that are creating costs with few benefits and makes necessary adjustments. In some cases, these adjustments are changes to the way a department does business.

Examples are following:

Pakistan Railway =

Pakistan railway have great potential for growth ,However the current process and technology does not provide much room for implementing growth strategies Pakistan railway can improve the performance of its various functions and department through proper use of information technology this includes: proper Seat reservations, Freight management, Asset management, Timetable.

PTCL =

Pakistan telecommunication ltd. Services in start was not so good and advance as compared to other countries public sector companies After the privatization of ptcl they apply reengineering process and improved their technologies and services. 

Microsoft =

Microsoft has been reengineering itself regularly over the last 17 years. This has been a key to staying competitive and in a leadership position. In employment terms, this reengineering will sometimes require reorganization for greater efficiencies.