A company that has undergone Downsizing

Downsizing refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees.
Many companies are experiencing it nowadays. One of these is the company, Phil Corporation Ltd. (Phil), incorporated in the year 1983. It was formerly known as Photophone Industries Ltd. and had been a major player in the field of photography business. It also ventured into the business of manufacturing and marketing of photography products. As its turnover kept on increasing, the company had by now increased its employee strength to over 2000 employees. The company achieved stupendous growth in few years since the time of its incorporation. But later, it had started facing stiff competition, which compelled the company to opt for the decision of downsizing its excess staff. Many companies like Kodak were promoting and selling products at the cost much lower than the products manufactured by Phil.
The company was now facing problems from all ends. Its sales had decreased and its profits were badly affected. Soon, the demand for its products reduced drastically and the work force was left without work. There was a need for quick action to be taken to arrest further losses. It had only one option: to reduce the excess amount of labors and then plan strategies to regain its lost ground. Although reducing the excess work force could face lot of resistance, it had to be implemented.
By the end of the year 1997, it started the downsizing process by identifying departments with excess number of workforce. It identified first 159 excess workers from the three factories of the total 450. The management floated the VRS option to the factory workers. According to this option,workers with over and above ten years of service with the company would be offered compensation of 45 days of their gross salary multiplied by the total number of years worked. The workers union did not accept this offer and demanded for 90 days instead of the offered 45 days. Since the management was reluctant to accept this demand, the workers observed a 'slow down' strike wherein they further reduced their production capacity. This was not agreeable to the management. This issue remained pending for a while until after long negotiations a total of 65 days of gross salary was agreed upon mutually. A total of 121 workers availed VRS Scheme while 38 of the excess workers did not accept the VRS option. This carried for over six months. Even as this continued, employees would resign as; either they were asked by the organization or voluntarily, finding better prospects elsewhere.
As employees kept on leaving, it had by now reduced the excess workforce and this problem appeared to be solved. Finally, the management decided on assigning back job responsibilities to the employees who remained in the company.

Reference:
http://www.indianmba.com/Faculty_Column/FC220/fc220.html