Organizations use various strategies for being competitive; one which is ''downsizing''. Almost all types of organizations, from corporate to government have opted for downsizing. The book first discuss the concept of downsizing. It further stresses the state of downsizing in Indian context and the causes of manpower reduction in Indian companies. Taking help of the various empirical studies, it discusses the effects of manpower reduction in India and the role of government in it. The study concludes that downsizing or manpower reduction does affect the HRM policies of an organization. Consequently, downsizing itself is caused by various environmental factors such as change in government policies, competition, cost considerations, foreign collaboration, greater margin, better infrastructure good HR policies etc. Government bodies, financial institutions and labour unions also play a major role in the success or failure of downsizing. Industries in different sectors changed their HRM policy differently when faced with downsizing. Thus, all the major HRM factors like recruitment, compensation, performance appraisal and transfers are significantly affected by downsizing.