A downsizing strategy at Archer Corp.has resulted in negative stock returns and lower profitability following the layoffs.According to your text,which of the following best explains the reason for these negative results at Archer?
A) Downsizing tends to eliminate good performers instead of poor performers first.
B) Downsizing demands the HR department have a third-party vendor provide services,which results in lower revenues.
C) Downsizing conducts a complete review of the organization's critical work processes,which results in heavy expenditures.
D) The HRM of a firm must provide downsized employees with multiple stock options.
E) When labor costs fall after a downsizing,sales per employee also tend to fall.

Question

Quizplus · Accepted Answer

The text suggests that downsizing can lead to lower sales per employee, which would ultimately result in negative stock returns and lower profitability.

A Downsizing Strategy at Archer Corp