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This reminds me of Reed Hastings (Netflix Co-Founder) talking about how after he had done layoffs (I think 30%) he found that they actually moved faster because all the dead weight was gone and the talent density had gone up.

This could also just be marketing spin however.

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This is actually true. Cutting people automatically causes a cut in scope of work. Teams become more picky and focused about the work they would do in the next few quarters.

BUT - the cut has to be management. Management is overhead. They are the reason why red tape exists. Every manager in the company adds more reporting, more paperwork, and more bureaucracy for people doing the actual work.

By cutting layers and layers, companies can become very efficient.

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