Which statement is true about downsizing?

A) HRM cannot, and should not, inform all employees why downsizing is necessary.
B) HRM should withhold information regarding downsizing rather than maintain open communication with remaining employees.
C) Downsizing is associated with positive stock returns.
D) Downsizing results in higher profitability following layoffs.
E) HRM can provide downsized employees with outplacement services to help them find new jobs.

Question

Michelle Johnson · Accepted Answer

Final Answer : E, Explanation :  HRM can provide downsized employees with outplacement services to help them find new jobs. This is a way to support the employees who are being laid off and to maintain positive relationships with them even after downsizing. The other statements are incorrect: HRM should strive for open communication during downsizing, it is unclear whether downsizing is associated with positive stock returns, and downsizing may actually result in lower profitability due to disruptions and costs associated with layoffs.

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