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Downsizing is a commonly used euphemism which refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees. When the market is tight, downsizing is extremely common, as companies fight to survive in a hostile climate while competing with other companies in the same sector.

Circuit City Group has undergone downsizing in order to streamline responsibilities, reduce field leadership costs, improve communication and provide clear lines of accountability with a minimal impact on headcount.

Circuit City laid off 3,400 of its highest-paid sales associates and may put its Canadian operation on the auction block as part of an ongoing restructuring aimed at lowering costs and improving its financial performance.

They laid off their highest paid sales associates and hired new employees who will be compensated at the current market range for those jobs.

references:
http://www.twice.com/article/CA6428673.html
http://www.answers.com/topic/downsizing?cat=technology