More on expense management: Categorize 100% of expenses as Category A (above 10%), Category B (between 5% and 10%) and C (rest). Create a strategy for each expense item starting category A 1/11
Involve line employees in this exercise since they know the impact of a cut in expense 2/11
Compensation is one of the largest of expenses. All employees should take a cut, with higher cuts at the top and lower cuts or no cuts at the bottom 3/11
Taking cuts in compensation is better for morale and brand than letting go some of the employees 4/11
Some expenses may come down due to reduced business activity and circumstances like travel or electricity. These will come back when situation improves - these are variable costs 5/11
Reduce R&D expenses in most cases. There may be some opportunistic R&D which will bring in immediate revenues which need to be incurred. Linkages have to be clear 6/11
Relook at debt costs and see if these can be refinanced at lower interest rates 7/11
Relook at sales & marketing costs - anyway decision making will be delayed. Hence focus these on existing customers 8/11
Eliminate all discretionary expenses around employee parties, improvements in facilities, new office locations etc. 9/11
Relook at growth plans and only those that will bring in immediate revenues need be taken forward 10/11
Renegotiate all supplier and services contracts. Some of these may need reduction anyway. Some of them can be prolonged 11/11
