Reminds me of something I read about back in the late 80s or early 90s about companies that manage to downsize themselves right out of business. CEOs see downsizing as a way to reduce expenditures, yet they seem to be unable to connect that with the loss of revenue that results from eliminating the very people who bring in that revenue.

On this story, we should point out that CEO for Circuit City took a combined salary/stock option of 17.1 million for the year, against the 8 million loss. Umm .. bet most anyone could turn that company around for a salary of only 5 mill.

Right on target, Dr. Bob.

Too many companies myopically look at only the cost end of the equation, forgetting that there's another side of the coin. Companies can brag about chopping out cost, but if you're left with a product/service nobody wants, what was accomplished?

There's nothing wrong with cost cutting, per se, as long as its intelligently done within a larger context. Cost-cutting purely for cost cutting's sake now has Circuit City as a great case study.

In the 25 years I've worked here there were two rounds of 'cost cutting empolyee staff reduction'. Both times I looked at those who I knew that were let go and although there was no 'personel' reason to let them go they were all among the least productive employees the company had. I understand from those I talked to else where in the company that was common across the other departments as well. It was simply a case of we need to reduce expenses and so we got rid of those who were least productive as a group and blamed it on the economic situation. Sometimes companies do get it right.