This problem looks like a strengthen EXCEPT question but it hasn't got an argument core. You can either think of it as a quirky strengthen question or an inference question.
Statement: midlevel bosses don't suggest getting rid of people even when they are overstaffed.
4 answers will suggest reasons why they don't want to fire anybody. The correct answer will give a reason why they would want to fire people.
(E) gives managers an easy way out. Early retirement is a lot better way of getting rid of people than by firing them. If managers had this easy option, it seems like they would fire more people... not less.
(A) helps explain why there's no firing. Managers get more money if they manage more employees. Obviously they don't want to fire people if they get a pay cut.
(B) also helps explain the lack of firing. Managers are lazy and they will get to work less if they don't fire anybody.
(C) is a more generous reason why managers don't want to fire people: team morale will suffer.
(D) is also nicer to the managers. The amount of work is unpredictable so managers don't want to fire people today and find they are understaffed tomorrow.
If you've still got questions after reading this, post away!
Demetri