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Opinions and views from expert CFOZone members.

Tag >> Six Sigma
May 26
2010

The benefits of painful cost cuts evaporate over time

Posted by annearf in Six Sigmaoperating cotscost cuttingCash

annearf

Companies have been slashing costs with abandon since fall of 2008--and they aren't likely to stop anytime soon. In fact, in April, 54 percent of more than 2,000 executives surveyed by McKinsey reported that they plan to reduce operating costs over the next 12 months, compared to 47 percent in February. 

Trouble is, such cost cutting seldom has much of a long-term payoff. According to McKinsey, only 10 percent of cost reduction programs show sustained results three years after companies wielded the ax. 



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