In business, downsizing means saving money by laying off workers. Although downsizing can sometimes make a company more profitable, it also results in people losing their jobs.
Downsizing is a way to make something smaller, and in the 1980s the business world started using this word to refer to the process of reducing a company's size by firing employees. Earlier, it was used by U.S. automakers to mean "producing smaller cars." And today it also means "moving into a smaller house," something people commonly do after their kids grow up and leave home: "My grandparents are downsizing — they sold their house and bought a condo."