It just seems counterproductive, removing your workforce because you want to grow more
In: Economics
Widget and gadget inc is using 10 people to make 10 widgets a year and 10 people to make 10 gadgets.
A new machine is bought that means 1 person can now make 2 gadgets. Also last year they only sold 5 widgets and our market research indicates there is demand for 24 gadgets
. We take two people working on the widgets, re-train them on the gadgets and lay three of them off. We now have three fewer employees but are making more stuff than ever before. We could also used the money saved from firing those employees to hire a researcher who will work on inventing an even more efficient machine letting us possibly grow more in the future.
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