What is the strategic purpose of a Divestiture in workforce planning?

• A. To acquire new assets
• B. To shed underperforming business segments or non-core assets to free up capital and focus resources on the core business
• C. To expand non-core activities
• D. To increase headcount in non-core units

Answer: (B)

Divestiture in workforce planning is about refining the business portfolio by shedding underperforming segments or non-core assets so you can free up capital and concentrate resources on what the company intends to be its core, value-driving activities. When a company divests, the HR function can redeploy talent, reduce roles tied to the exited units, and reallocate staffing toward priorities in the remaining business. This streamlines the organization, improves cash flow, and enables investment in capabilities and growth areas that truly matter to the core strategy. The other ideas describe expanding or sustaining activities that aren’t aligned with divestiture’s purpose, or increasing headcount in areas that are being exited, which would undermine the goal of focusing on the core business.