Downsizing is the process of moving a function from a mainframe computer to a smaller computer such as a a LAN or a PC. In a business enterprise, downsizing means reducing the number of people working in the company on the operating payroll. There is a difference between between downsizing and layoff, which people usually mix. Downsizing means letting people go, without the chance of being rehired. This happens due to many reasons, but the major reason is because the company’s business has felt and they can’t afford to pay some amount of workers, and therefore need to let them go. When this happens businesses use several techniques to make it easier for the people they are firing. For example, they try to find a way for earlier retirement or transfer them to a subsidiary firm. But the technique which is the most common is just to terminate the employment of a certain number of people. On the other hand, layoff means that people who are being fired have a chance of being rehired. The company is going through a rough patch and is able to pay a certain number of workers, therefore needs to layoff some. However, there is a chance that, if the company comes back up, these workers can come back to work.