indeed, there seem to be two ways for a company to manage economic difficulties 1/ cut costs - this risks damaging the company sufficiently to make the situation worse, and the best staff will take settlements and run, and cost a lot to replace 2/ work better - make better use of the staff to innovate and become more productive to maintain market share and minimise loss of profits unfortunately, shareholders usually only reward the quick fix, ie. 1, and so directors and upper management get forced into quick and stupid actions. take a look at the share price of a company when they announce job cuts, and compare with changes when they announce new investments/strategies!