Restructuring is a popular management technique used in business. Why is restructuring used?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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As with most things that businesses do, the reason for using restructuring is to maximize profits.  Restructuring is seen as a way to make a business run more efficiently and, thereby, make more money.

In a restructuring, a firm generally takes actions that lead to the loss of jobs.  It may sell off or simply close down parts of its operation that are not making money or are not part of its core competency.  It may increase the amount of automation that is used to make its goods and services.  It may work to streamline its operations.

In all of these cases, it is likely that jobs will be lost as operations are closed or become more efficient.  This is seen as the price that must be paid in order for a firm to remain competitive.

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