The project manager of an agile project has been asked to reduce the budget by...

 The project manager should prioritize the product backlog looking for high business value and low effort, and adjust the project budget and staffing to account for those items, as this is a strategy that aligns with the agile principles of delivering value early and often, and responding to change over following a plan1. By focusing on the most valuable and feasible features, the project manager can maximize the return on investment and customer satisfaction, while minimizing the waste and risk. The project manager should also collaborate with the product owner, the team, and the stakeholders to review and reprioritize the product backlog regularly, and to adapt to the changing requirements and constraints. Reducing the project staff and adjusting the scope and timelines accordingly in support of the budget reduction (option A) may not be a viable strategy, as it could compromise the quality and functionality of the product, and create dissatisfaction and demotivation among the team and the customers. Balancing the project team in order to accommodate the budget challenges, and providing training to mitigate the risk of low performance (option B) may not be a feasible strategy, as it could incur additional costs and time, and disrupt the team dynamics and productivity. Restricting the project scope only to basic critical features and running the project with the current staffing level until all of the budget is consumed (option D) may not be an effective strategy, as it could ignore the feedback and expectations of the customers, and miss the opportunities to deliver incremental value and improve the product. References:

1: Agile Practice Guide, Project Management Institute, Inc., 2017, p. 8.