Five tips to cut costs without dismissal!

4 minutes to read

We live in a delicate moment, in which many companies need to cut their fixed costs to survive in the midst of the crisis generated by the Covid-19 pandemic. Therefore, we have separated some tips to help with this. But, first of all, it is worth reflecting on the reasons that a company has to cut costs without dismissal:

  • social: the social impact of dismissals is always bad, but even greater when it occurs en masse;
  • economic: the economic impact of unemployment rates is high. Without work, people do not buy and economic activity decreases, affecting everyone;
  • structural: no company operates without a team, and you will need it when resuming;
  • increase in future expenses: the cut cuts costs immediately, but creates the need for investments in training and hiring in the future.

You may have other reasons that directly affect your company, both for not firing and for doing the opposite, but our intention is not to give an opinion on what you should do, but to help with some tips. Continue reading and check it out!

1. Collect information

There are no magic cost-saving formulas, even though there are some common spending cuts with great chances of generating savings – like setting aside unlimited phone plans, which you don’t need right now as a result of declining activity. However, some companies may have other, much more significant expenses to worry about.

So, start by auditing the current costs recorded in your management systems. Observe carefully the changes that occurred after the pandemic and list each one in order of relevance. Start with the ones that have the greatest impact.

2. Negotiate contracts

Telephony plans also serve as an example in this topic, but it also involves contracts with suppliers, other service providers, employees and even customers. Workload reduction, overtime cut, loans, recurring service payments, rents and various other agreements can be revised.

3. Optimize processes

Cost savings are not always due to lower payments. It also comes from increased productivity, automation and process optimization. Therefore, this is the time to review them.

4. Adjust the stock

With sales declining, no company needs to maintain its previous inventory level. If you lower it, it will also reduce storage costs. But be careful! It may be tempting to spend all the money the company is going to raise, but it will be necessary to restore current levels in the future, when everything goes back to normal.

5. Innovate

Innovating in the processes and business model to adapt to the current reality is a great way to reduce costs, if there is no need to make large immediate investments. Consider that the economy has not stopped with the pandemic. It has shrunk and changed. People continue to have problems that they need to solve and are even more in need of quick solutions. Help them with that and the pressure of declining sales will be reduced.

To conclude, receive our congratulations for your interest in alternatives to cut costs without dismissal. After all, humanity needs people dedicated to the restoration of economic activity, which we will only do with individuals working. With patience and dedication to understand the problems, added to the right strategies, efficiency and organization, we will soon be able to overcome this great challenge together.

Before leaving, leave your comment below. Talking about this topic is fundamental at this point.


The VMI Portal is a portal of news and information on systems of collaboration between suppliers and customers, which is growing continuously. The idea is to promote and disseminate the concepts of Supply Chain Management (SCM) and Vendor Managed Inventory (VMI), among other topics.

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