Comments on: Are layoffs my only cost-cutting option?

By: Atlanta House Cleaning

Atlanta House Cleaning — Fri, 09 Jan 2009 21:16:26 +0000

We at Atlanta House Cleaning could not disagree more with the earlier respondent who suggested that cutting advertising costs are another option. A business' survival depends on ability to attract customers in any business climate. Even during the great depression, over 3 out of 4 people were still employed. This means there will always be market out there that has demands that must be met. Cut what you must, but don't cut advertising.

By: Murali.R, Trivandrum, India

Murali.R, Trivandrum, India — Tue, 25 Nov 2008 05:11:32 +0000

Employee Layoff is not a creative way for business to achieve savings. Other better options in my personnel opinion are:

a) Less working hours: You can reduce the incentives and other allowances, electricity bills and other expenses related to it.
b) Reduce advertising costs; during this period.
c) TA/DA of higher officials can be reduced or even cut for a time period. They will be allowed to claim only originals.
d) Communications through emails should be practiced at this time.
e) Kindly ask the employees to switch off all electrical equipments when not in use.
f) personnel use of internet should be restricted.
g) Usage of office vehicles for personnel use should be banned. Log book for this to be maintained. Unnecessary repairs of office vehicles should not be allowed.

The above listed are very simple things; a lot more can be added in the list.

By: edwim

edwim — Thu, 20 Nov 2008 16:46:57 +0000

Thank you very much for your post. Absolutely excellent information and very useful for me. Great done and keep posted. Looking forward to reading more from you.

By: S. Dailey, Denver, CO

S. Dailey, Denver, CO — Wed, 19 Nov 2008 22:17:57 +0000

All of the tips suggested are good, but they only address employee and employee-related costs. I've found many opportunities over the years to cut overhead costs that often go unnoticed, such as:

1. Transporation, both LTL/TL and small package shipping. Many companies negotiate an agreement then never re-negotiate when the company grows and volumes increased, thus leaving lots of $ on the table. Additionally, with excess capacity in the LTL market, now is the time to renegotiate discounts, FAKs, etc. Just be sure to sign-on with a company that will weather the downturn.

2. Office supplies & equipment.
3. Little things like coffee, water coolers, uniforms, etc.
4. Wireless services.
5. Telephone services.
6. Any other services, e.g. custodial, repair, maintenance.
7. Temporary labor.

It is time consuming to address all of these items, so use your 'gut feel' to prioritize and start plugging away. Normally my approach is to go back to my current supplier and ask for a price reduction … if they say 'no', then bring in the competition, submit a formal RFQ to the existing supplier and competitors, and then choose the best value for your firm. Don't forget to lock in pricing for as long as possible, and include a 'termination for convenience' clause into the contract.

Happy shopping.