Long-Term Pain for Shareholders
Big Job Cuts Mean Short-Term Gain, Long-Term Pain for Shareholders, Study Finds, article.
Turns out firms that cut aggressively aren't prepared to ramp up quickly once the recovery begins. In contrast, peer firms that cautiously trimmed are well-staffed to take advantage of a swift shift in momentum. "You can't shrink your way into prosperity," says Cascio in the article.
Of course one should take into consideration whether the staff pool is actually very bloated or whether everybody is pulling their weight.