Agreed! Iowa's genius governor did a hiring freeze for the state universities. Which mean researchers could not spend their grants in Iowa; they fled. Brilliant move.
I hadn't even thought of that unintended consequence.
A firm I used to work for did a hiring freeze. The well run parts (in a part of the world that is easy to fire people) of the organization obliged. The poorly run parts (in a place that's hard to fire people) didn't. So the bloated core got fatter, and the money generators got starved for growth.
Happens so often - like executives can't do simple math. Example: I contracted at a mobile-handset company. Their best seller accounted to 40% of revenue. The CEO came to our site, gave a talk: you guys have to cut down R&D expenses, you amount to 20% of total R&D budget.
So, 20% of R&D yielded > 40% of revenue (more than one product came from our site). How is that a problem? I was flabbergasted. As a contractor I said nothing, but was astonished no one else spoke up either.
I get the need to improve productivity but blind mandates suggest that something else is wrong.
At yet another employer they did a very well thought out layoff of approx 15% of the workforce. It was very well thought out and preceded by 6 months of heavy analysis on new ways to work. The culture was hurt but the firm saw process improvements too. Perhaps it was too easy as every time management needed to cut after that, they skipped the process improvement step.
I guess I see it differently. It seems to me that you can cut back, and enter the profit-margin-death-spiral. Or you can invest in new growth.
And our site had the highest return on investment in the company. Cutting back was suicide. In fact, that's how it played out - declining revenues due to a stagnant product line, for years.
I'm with you - I just don't think I wrote clearly enough above.
If a company blindly cuts every division the same amount, it's dumb. 20% across the board cuts penalize the productive too much, and don't cut the unproductive enough. It's better to get the same cost savings by shutting down or stopping unproductive activities, letting go or selling the least productive activities, and investing in the future. You can still get the 20% personnel cut, but some places lose 50% of their staff, and others gain staff.
