What is retrenchment?

Retrenchment is a strategic business decision made by a company to reduce operational costs and improve overall efficiency. This often involves cutting back on staff, closing certain business operations, or selling off assets that are no longer profitable.

Retrenchment is typically used as a last resort when a company is facing financial difficulties or needs to restructure its operations to remain competitive in the market. It can be a difficult and challenging process for employees who may lose their jobs as a result.

Companies may use different methods of retrenchment, such as offering voluntary redundancy packages or implementing forced layoffs. It is important for companies to handle retrenchment in a compassionate and fair manner, ensuring that employees are treated with dignity and provided with the necessary support and resources to transition to new employment opportunities.

Overall, retrenchment is a significant decision that can have long-term implications for a company and its employees. It should be carefully planned and executed to minimize the negative impact on stakeholders and ensure the company's long-term viability.