Dumbest thing your employer has done to cut costs.

In My Humble Opinion
1

I know we’ve done this before.

This is inspired by Sailboat’s post in the thread about the worst place to have a desk.

His company sent out hard copies of legal paperwork offshore so that some cheaper country could do the data entry. I code and file legal paperwork every day, and there are a million ways to get it wrong if you’re not trained in this, and I can’t imagine my law firm offshoring this kind of work - it’s too risky.

My contribution: my current firm once ditched Adobe and then foisted some bargain basement portable document format application on us. It was the shittiest piece of software imaginable. We need very accurate software to do what we do, and one that is streamlined and intuitive as well. That piece of crap was unworkable by even the most sophisticated paralegals here. But I bet it showed up on some bean-counter’s self review in a list of “cost-cutting achievements” for that year!

After a year of it we went back to Adobe. Thank God.

How about you?

2

I worked at a very small company that made custom diamond engagement rings. We were working on a browser program to allow them to be customized on site and had a reasonable business going even though that hadn’t been completed yet.

By “very small” I mean “four people”. The boss/owner, the cad designer, and two coders to handle the internet stuff (one of whom was me). (The actual manufacture of the rings was outsourced, I think.)

Then, after I’d been there a year, the boss partnered up with a company in India and fired us programmers. Outsourcing, baby!

They were out of business within a year.

3

I work in a very large complex full of labs and offices. Our workplace has long hallways with fluorescent light fixtures in the ceilings. Each fixture holds four bulbs.

About 15 years ago someone came up with an ingenious idea to save energy: remove half the bulbs; each fixture would have two bulbs instead of four.

They went ahead and did it.

Over the next few months they closely monitored the usage of energy (kWH) for our building. The data showed no decrease in energy usage. :stuck_out_tongue:

The bulbs were eventually put back.

4

Many years ago my school at the U of Chicago decided that somehow if they stocked fewer colors of pens in supply, people would use fewer pens. So they only ordered black and blue ink pens.

So for several months there were no red pens to use. Made marking papers much harder. We finally convinced them to go to either blue and red or black and red.

5

I used to work for Kinko’s, during the period when they were owned by a Venture Capital firm who planned on taking the company public. They did a bunch of things to try and standardize operations and cut costs. What follows is just one of their bone-headed moves.

To follow my point you need to understand a little bit about the economics of the business.

The big copier/printers were not owned by Kinko’s, they were leased directly from (usually) Xerox. The lease had three components: 1) the lease itself, usually a 5-year deal, 2) a usage charge which was structured as x number of impressions free each month and y cents per impression above x, and 3) a service plan, tailored to the needs of the user.

After the 5-year lease was up, rather than immediately getting a new machine, usually you would roll over to a month to month deal, with a lower monthly payment and (here’s where it got really attractive for the user) no impression charges.

My branch had a Docutech 5690, with a digital front end which allowed us to do some really cool and useful document manipulation. This was our most important machine, doing more than 60% of our black and white production. At the time this went down, it was at about year 4 of the 5 year lease. We definitely would have kept this machine on at the end of its’ lease, as it was a well-running, versatile and productive machine which we were used to, even to the point of being able to do some repair tasks that might have otherwise required downtime while waiting for a service call. And it would have been really inexpensive to run.

So, what happened was that some bean counter in the corporate office determined that company-wide there was a large amount of unused production capacity. The solution for this was to get rid of all Docutech size machines and replace them with a brand new line of much smaller machines from Xerox. Note I said ALL. There was no attempt made to determine which branches had production requirements that merited the machines they had.

The new machines had production abilities of less than 50% of our 5690. Further, they were a brand new design, with a ton of bugs, and Xerox had not yet trained anything like enough service techs on the machine.

The result was that we were now saddled with a main production machine which on its’ best day was not capable of the volume we required, was down a large percentage of the time and we could no longer get the 24/7 service we had had for the 5690. We also lost the ability entirely to do some regular and highly profitable jobs which required the use of that digital front end.

The corporate solution for this dilemma was to farm out work to other nearby branches which still had excess production capacity. Unfortunately, that just wasn’t practical as so much of our work was on tight deadlines, which didn’t allow for shipping stuff back and forth. We wound up having to turn down business and losing customers because of this.

Basically, they took a branch which was consistently very profitable (in the top 1% company wide), shot us in the foot and then told us to keep running the race. I think you can guess the results.

It’s likely that the financial performance of some of the less productive branches improved from this strategy, but I refuse to believe that destroying your best performers is a viable business strategy.

6

I’ll always say the coffee (and other such perks). Whenever a company starts messing with the coffee and such other little fringe perks, you know it’s a bad sign as somebody is desperate to show a cost savings somewhere, and it’s easiest to take it out on your employees.

7

The original owner of the company where I work was very tight. He would buy service truck at auction from the local phone company, and he would only bid on the cheapest. Some of our “new” trucks would have well over 100k miles. He also thought that regular maintenance such as oil changes was a waste of money.

8

Not paying their employees what they were worth. Thus good people left after a while and started up their own, directly competing, businesses. So the owner was in the business of training his competittors.

9

My employer was the US Army.

During the post Cold War draw down it was decided to deactivated the 2nd Armor Division. This was part of the overall reduction in forces to save money. At the time most of the 2nd Armor was sharing Fort Hood with the 1st Cavalry Division.

So the entire division went away. All of the personnel were transferred elsewhere. Families were relocated. Household goods moved. A division’s worth of equipment was moved. It was a big undertaking.

A few months later part of the realignment meant that Fort Polk was going to become a training post. The 5th Infantry Division needed a home so it was moved into the vacancy left by 2AD at Fort Hood. The entire division moved from Louisiana to Texas. Families were relocated. Household goods moved. A division’s worth of equipment was moved.

A very short time later someone decided they wanted an armor division not an infantry division. So they waved a magic wand and 5th Infantry became 2nd armor. But the magic wand didn’t change the infantry into tankers so again many had to be relocated and tankers brought in.

Not long after that 2nd Armor was deactivated again.

10

Back in the pre-computer days, I worked at a place where the office manager kept the supply cabinet locked. If you wanted anything, you had to ask her to unlock the cabinet.

Being as how it was the pre-computer era, people needed a lot of typing paper, typing ribbons, white out, etc., in addition to the usual need for ruled pads, pens and day-to day stuff. The office manager was constantly interrupted by people asking for supplies. She couldn’t get anything done, and everyone else was slowed up by needing 5-10 minutes to find the office manager to unlock the cabinet, instead of just grabbing a pencil themselves

Of course people started hoarding supplies, taking three boxes of paperclips when they only needed one, stuff like that. In addition to the office manager being interrupted all day, office supplies disappeared at a much faster rate than the size of the company would suggest.

I’m convinced that buried deep in a landfill somewhere, there are a bunch of old desks, each with a locked drawer stuffed full of stenographer pads, #2 pencils, erasers, red pens, and unopened boxes of staples.

11

The dumbest cost savings I’ve seen was when a venture capitol firm bought out the oil company I worked for. They noticed that the initial production of the well wasn’t effected by the size of the frac job but the decline in production was. They decided they could sacrifice the total recovery for each well in order to decrease the cost to drill and put the well on production. Basically this boosted the short term cash flow and increased the total cost to develop the field since it was estimated the would need double the total numbers of wells. Of course the real problem is that those additional wells may not be possible to drill those extra wells due to depletion and the induced fractures so they may have destroyed that oil field.

Luckily that company went bankrupt just a couple of years later.

12

Yup, this. Pay people just enough so that they stay around long enough to get trained and go find a job somewhere else.

13

I thought I had nothing, but then remembered the one ad-hoc cost-cutting measure I went through - bouncing December’s paycheques didn’t work out well for that employer.

14

Was this done on purpose?

My next-to-last pharmacy job was through a temp agency, at a startup. I was one of the few employees who could count on being paid, because I was paid through the agency. We also had to buy our own paper towels, trash bags, etc. and the guy who did had a heckuva time being reimbursed.

Believe it or not, the company is still in existence.

15

Bing. Go.

Way back in the late 1980, early 90s I worked for a digitizing firm. We digitized paper maps. Very high tech for its time. But brutal work. The place ran 24/7. But really, it ran on coffee. About 12 people on graveyard crew.

They brought in one of those 50 cent a cup piss machines instead of buying us actual you know, coffee we could brew. Laid me off three days before Christmas they did. Such a nice bunch. Company was dead in 2 years.

16

My dad used to love to tell this story:
He was an executive at a medium-sized Operations Research company. All the department heads were at a status meeting with the president of the company, going around the table and reporting on their departments. When they got to accounting, the head of the department reported that it appeared that employees were taking office supplies home, so that their kids could use them in school. The president of the company said “Are we the kind of company that doesn’t let employees take some pencils and pads of paper for their kids to use in school?” That was the last time anyone brought up missing office supplies.
Sadly, I worked for the opposite type of company, where, to make a point, the president wouldn’t allow general stores to buy pads of paper or pens or pencils, so people had to provide their own. Since I was a smart-ass, I used to write my reports using crayon on the back of scrap paper, which pissed my boss off, but not enough for him to stand up to the president’s stupidity.

17

We came to work one morning and were told that from then on, we’d be paid 70% of our agreed-upon salaries, and if we didn’t like it we could go hang.

I did hang…around. To collect my 70% paycheck for as long as they paid it to me, and do basically no work in return. They kept me till they were bought and gutted.

18

Back in the earlier days of database servers I did some contract work for a company that had a fair number of workstations running applications using databases on said server and utilization ran around 50%. For those outside the field, 50% is an excellent number and the target is around 70-75% before things start getting laggy. Over time as they added workstations and applications the utilization gradually crept up to 80% and people were noticing pauses when pulling up records and reports. Nothing show-stopping, just noticeable. We had already advised the owner that it was time to start looking at upgrade options to keep things moving smoothly. Nope. There’s still 20% left so there’s plenty of room/time for expansion. 85% goes by. 90% and we’ve been trying to explain to him just how this is a bad thing but we were effective told that until it’s operating at 100% there’s nothing to worry about.

Well, it got to the high 90’s and servers that operate at those levels don’t operate long. And it didn’t. He never would divulge just how many millions evaporated during that downtime while we rebuilt, reloaded, and restored the backups. We did make sure we were getting good backups because we knew what was coming.

19

I was told it wasn’t, but he was the kind of guy who would say or do anything to keep up his image - at least the image he kept in his own mind.

I left as soon as I could.

20

I had a boss one time that decided he didn’t need an assistant, in the name of saving money (Corporate had said, “Save every penny you can,” and this jackass decided to be the vanguard of such a policy). His staff could handle his calls, do his typing, and so on. Well, we weren’t hired to be assistants, so we didn’t put a lot of effort into it–real work that we had been hired for took precedence, in our minds. So his phone calls went unanswered, and his typing was set aside until we could get to it.

When he took us to task for not acting as his assistants, we reminded him what we were hired for. He didn’t like what we had to say, and promptly fired one of us. “Do you want that to happen to you? Do as I say.” Naturally, the work on the rest of us increased, in addition to dealing with what his now-non-existent-assistant should have done.

Within six months, he had no staff; we all left for greener pastures under more understanding bosses. His department was gutted. We who had left told colleagues–through the grapevine–interested in jobs there, that this was no place to work. The department died; it could not attract job applicants.

We did not cause the death of the company; we were small potatoes in the grand scheme. But other departments had the same problem, due mainly to Corporate saying, “Save every penny you can,” and managers taking that to heart, in an effort to look good to Corporate. In the end, innovation died, employees left, and a $50M company was sold for $8M in the following year. As I see from a Google search, my old boss is now trying to sell real estate. Not sure if he’s been successful.