Rational Cost Cutting

As the bubble of capitalism has now burst, managers of large corporations are eager to improve their dismal decreasing profits by cutting costs. At first, they reduce perquisites, but soon they invariably resort to layoffs. Here I propose a rational, phase-wise approach to staff-related cost-cutting.

Phase 1: Reduce the salaries of high-level managers.
In this phase, reduce the salaries of such managers. Managerial bonuses and perquisites should be sharply reduced or even eliminated as the management goals clearly have not been met.

Phase 2: Consolidate high-level management.
In this phase, assign the duties of two or more such managers to a single manager. Managers who are relieved of their duties should be lowered in rank by one level, with the corresponding pay cut.

Phase 3: Reduce the salaries of middle-level managers.
In this phase, reduce the salaries of such managers. Managerial bonuses and perquisites should be sharply reduced or even eliminated as the management goals clearly have not been met.

Phase 4: Consolidate middle-level management.
In this phase, assign the duties of two or more such managers to a single manager. Managers who are relieved of their duties should be lowered in rank by one level, with the corresponding pay cut.

Phase 5: Consolidate staff on all levels.
In this phase, some employees will be laid off. Layoffs should be based on three factors: seniority, efficiency, uniqueness of contribution.

NOTE: This proposal is not a complete process of cost-cutting. Obviously, other methods may also be adopted simultaneously (for example, laying off anyone deemed to be responsible for significant profit loss and discontinuing product lines with minimum contribution to profitability). This proposal merely attempts to offer an efficient and humane approach to employee remuneration and job security.