Cost reduction refers to efforts made by a company or organization to decrease expenses and lower costs in order to improve profitability, increase efficiency, and maintain financial stability. This can be achieved through various methods such as reducing waste, streamlining processes, renegotiating contracts with suppliers, outsourcing certain tasks, implementing cost-cutting technologies or automation, downsizing the workforce, or restructuring business operations to reduce overhead costs. The goal of cost reduction is to optimize expenses while maintaining high quality standards and preserving the company's competitive edge in its industry.