What does 'downsizing' mean?

[ashish kakadia]

Test No. incompl/advan-76 "Internet Business", question 3

One of the fashionable ways of saying you've been sacked is to say that your company is .........sizing but you've still lost your job.

(a) down
(b) cut
(c) out
(d) through

Test No. incompl/advan-76 "Internet Business", answer 3

One of the fashionable ways of saying you've been sacked is to say that your company is downsizing but you've still lost your job.

Correct answer: (a) down

Your answer was: incorrect
One of the fashionable ways of saying you've been sacked is to say that your company is outsizing but you've still lost your job.
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please give me explanation of this question

[Torsten]

If a company downsizes they reduce the number of staff empoyed, they lay off some of their employees.

TOEIC short conversations: Two business people meet at a conference