Cost Cutting – A Few Comments

McKinsey Quarterly had an interesting May 2010 article on cost cutting.

I have many thoughts on the issue of cost cutting.  The issue is complex and  particularly challenging as detailed data and analyses on the subject seem to be lacking, despite cost cutting’s widespread popularity over many years.

While prudent management of costs is of course beneficial, I believe that in general, the benefits of cost cutting are often exaggerated.  The reasons for this are various.

However, the detriments of cost cutting are rarely acknowledged or discussed.  This is unfortunate as these detriments can be very significant and pernicious across a variety of fronts.

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