Downsizing may not save company, but put it on a path to bankruptcy

Vantage point: Insights from cutting-edge research

While downsizing may be capable of producing positive outcomes, such as saving money in the short term, it puts firms on a negative path that makes bankruptcy more likely, according to researchers from Auburn University, Baylor University, and the University of Tennessee, Chattanooga. In an article published in the Harvard Business Review, authors Michelle L Zorn, Patricia Norman, Frank C Butler and Manjot Bhussar pointed out that while downsizing is not always fatal, it does increase the chances of a firm declaring bankruptcy in future.
 
“We found that having plentiful financial and physical resources did not replace the downsized employees, who fulfilled multiple roles as workers, knowledge bearers, and cultural contributors within the firm. Having ample capital is often viewed as a corporate panacea, so it was unexpected and interesting to find that financial resources did not contribute to the prevention of bankruptcy for downsizing firms,” they added.
 

Cloud infrastructure as service to exceed data centre outsourcing spend in India
 
Cloud infrastructure as a service will exceed traditional data centre outsourcing spend in India during 2017, according to Gartner, Inc. In India, traditional data centre outsourcing is forecast to reach $559 million in 2017, while cloud infrastructure as a service spending will total $677 million this year. Gartner analysts said that by 2021, cloud compute and storage as a service will be nearly three times that of traditional data centre outsourcing in terms of spending in India.
 
“As the demand for agility and flexibility grows, organisations will shift toward more industrialised, less tailored options,” said DD Mishra, research director at Gartner. “Organisations that adopt hybrid infrastructure will optimise costs and increase efficiency. However, it increases the complexity of selecting the right toolset to deliver end-to-end services in a multisourced environment.” Gartner predicts that by 2020, 90 per cent organisations will adopt hybrid infrastructure management capabilities.

 
Cryptocurrencies are increasingly being used, stored, transacted and mined
 
More than three million people (three times previous estimates) are estimated to be actively using cryptocurrencies like bitcoin, finds the first global cryptocurrency benchmarking study by the Cambridge Centre for Alternative Finance. While many members of the general public may have heard of “bitcoin”, the first decentralised cryptocurrency launched in 2009, a new report from the Cambridge Centre for Alternative Finance paints a broader picture of “cryptocurrencies”.
The report shows that cryptocurrencies — broadly defined as digital assets using cryptography to secure transactions between peers without the need for a central bank or other authority performing that role — are increasingly being used, stored, transacted and mined around the globe. The Global Cryptocurrency Benchmarking Study gathered data from more than 100 cryptocurrency companies in 38 countries, capturing an estimated 75 per cent of the cryptocurrency industry.