I guess I see it differently. It seems to me that you can cut back, and enter the profit-margin-death-spiral. Or you can invest in new growth.
And our site had the highest return on investment in the company. Cutting back was suicide. In fact, that's how it played out - declining revenues due to a stagnant product line, for years.
I'm with you - I just don't think I wrote clearly enough above.
If a company blindly cuts every division the same amount, it's dumb. 20% across the board cuts penalize the productive too much, and don't cut the unproductive enough. It's better to get the same cost savings by shutting down or stopping unproductive activities, letting go or selling the least productive activities, and investing in the future. You can still get the 20% personnel cut, but some places lose 50% of their staff, and others gain staff.
And our site had the highest return on investment in the company. Cutting back was suicide. In fact, that's how it played out - declining revenues due to a stagnant product line, for years.
I work at a startup now.