Rarely do companies thrive by cutting heads with only the bottom-line in mind. This has proven to be an extremely ineffective practice that nearly always renders the company defenseless in its market. In most cases the best and the brightest people leave first before they are let go.
Give me the name of any tech company other than IBM that survived let alone thrived by cutting headcount without regard for their future. Digital, Xerox, Kodak, Nortel, Lucent even HP has implemented this “cost cutting” practice, and they all went under or are now irrelevant.
In any business, the employees are the definition of who and what the company is and can do. Most executives know their unique position in their market is a key to their strength, but often the importance of a congruent workforce is not perceived as a high value preferring to work on efficiency.
Companies with household brands like Tide, Pepsi, Cheerios aren’t under the same pressure to retain its labor force because their products will be purchased regardless. But this hardly applies to most other companies with brands that are unknown outside their specialized niche.
Have you noticed the best performing services organizations often win the “Best place to work” awards? This isn’t by accident or happenstance. It’s nearly always by design because the senior executives of those companies understand their true value is their people. It’s also because they have learned that sustained growth comes from consistency and that comes from a consistent work force.
So if your company is experiencing growth difficulties, you should consider adding a new strategy to drive your program versus subtracting some employees from your ranks.