Right, which is more indicative of how yearly budgets which don’t factor in continual employment of staff lead to the morale decline I mentioned. Perhaps the manager isn’t actually capable of doing much about it, and can only spend or not spend their budget. But that indicates a failure in the company as a whole; at least if keeping employee morale high is a goal (which it definitely isn’t at many companies.)

Even then, the mismanagement of funds just communicates a level of incompetence that is more demotivating than cuts from an actual lack of funds, IMO.

“Sorry, the market has shifted and we can’t afford this,” is at least somewhat understandable when you have trust in management’s ability. When you don’t, it comes unpredictable and chaotic - never a recipe for getting good work done.