Brace for Impact – Expense Cuts No Silver Bullet
Enterprises are cutting operational expenses for 2009. Common expense reduction items cited include:
- Eliminate Travel
- Eliminate Training
- Cut Contractors
- Layoff Employees
- Extended shutdown during the Holidays
- Eliminate employee reimbursements for cell phones and Internet access
- Eliminate trade show exhibits
- Reduce Management bonuses
- Reduce Staff salaries
- Stop Hiring
- Consolidate or eliminate physical locations
However, even an arm-chair economist knows that cutting expenses alone does not ensure business survival. Now that the latest job loss numbers are out, the acceleration effect those job losses have on confidence and other industries will be telling. This effect will be fueled by media-led fear-based metaphors and inaction by those watching the panic parade.
After you’ve cut the expense side of the equation ( one hint: Kill your Weak IT Projects Right Now), what are you doing about the demand side of the equation?
The C-Suite can not legitimately hide behind “unexpected weaker demand” and fail to act. By now, who doesn’t expect weaker demand?
The question is, what are you doing to stimulate the demand for your products and services given the economic downdraft?
