When Cutting Deep Actually Works: The Brutal Math That You Shouldn't Ignore

"We cut our workforce almost in half, went from two shifts to one, and we still managed to get 17-18% more product out the door."

I paused when I heard this last week.

Not because the numbers didn't make sense they did, unfortunately. I've seen enough overstaffed operations in my career to know it's possible.

I paused because of what it takes to actually execute something like that. And more importantly, to make it work.

The person telling me this was a President at a mid-sized ingredients manufacturer. Three years into private equity ownership. Two years of trailing the business plan that was written at acquisition. And a clear understanding that year three needed to be different.

So they made a decision that most leaders talk about but few have the stomach to execute.

They restructured the entire shop floor.

The Reality Before the Cut

Here's what they were dealing with:

A facility that had grown organically over years. Layers of staff added incrementally as the business evolved. Two shifts running with what felt like comfortable headcount - not lean, but not obviously bloated either.

The kind of situation where you know there's inefficiency, but it's hard to pinpoint exactly where. Everyone's busy. The work is getting done. Customers are being served.

But the margins told a different story.

Post-acquisition, when the PE firm ran the numbers with fresh eyes, the opportunity or depending on your perspective, the problem - became clear. The operation could run significantly leaner without compromising output.

The question was: did leadership have the courage to make that bet?

The Decisions

They didn't just trim around the edges. They made structural changes.

Workforce reduced by nearly 50%. Two shifts consolidated into one. Processes streamlined. Roles redefined.

This wasn't about asking people to work a little harder or squeezing out 5% efficiency gains. This was a fundamental restructuring of how the operation ran.

And here's the thing that made it work: they didn't stop there.

While they were restructuring operations, they simultaneously attacked the supply chain. Post-acquisition, they had leverage they didn't have before as an independent business. They introduced dual sourcing where they'd been single-source dependent. They renegotiated contracts with better terms. They optimized procurement across the board.

On the commercial side, they were building pipeline aggressively. New customer wins across multiple categories. The diversification strategy they'd been working on started to pay off.

Business was coming in the door - they just needed to be able to fulfill it profitably.

The Results

Year three, they blew their business plan out of the water.

Revenue way up. Profits way up. The operational leverage of running leaner while producing more created dramatic improvement in the P&L. Combined with the procurement savings and the new business wins, they went from trailing by year three to exceeding where they were supposed to be in the original acquisition case.

They caught up everything they'd missed in years one and two, and then surpassed it.

The PE stakeholders, who are rarely easy to impress - were of course, impressed.

But more importantly, the business was healthier. More competitive. More sustainable.

The Part Nobody Talks About

Let's be honest about what this actually means.

When you cut your workforce in half, you're letting people go. People who showed up every day. People who had mortgages and families and routines built around that job.

This wasn't about cleaning up obvious dead weight or poor performers. This was about recognizing that the business had been structured inefficiently, and fixing it required difficult decisions that affected real people.

The President I spoke with didn't gloss over this. He didn't frame it as some kind of effortless victory. These were hard calls. The kind that keeps you up at night. The kind where you question yourself even when you know that it's the right move for the business.

But here's what separated this from the countless restructurings that fail:

They had conviction. They did the analysis. They made the bet. And then they committed fully to making it work.

They didn't half-step. They didn't reduce headcount by 20% and hope that would be enough. They went all the way to where they believed the operation could sustainably run, and then they rebuilt processes around that new reality.

The Courage Question

I've worked with dozens of companies over the years where everyone knew the operation was overstaffed. The PE firms knew it. The board knew it. Often, even the management team knew it.

But most leaders don't pull the trigger.

They nibble around the edges. They do 10% reductions and call it "rightsizing." They sit back and wait for people to leave on their own, hoping the problem solves itself.

Why? Because making deep cuts requires a level of conviction that most people aren't comfortable with.

You have to believe, truly believe, that you're right about what the operation actually needs. You have to be willing to weather the short-term disruption. You have to absorb the criticism, the doubt, the uncomfortable conversations.

And you have to live with the possibility that you might be wrong.

This President had something working in his favor: he was relatively new to the business. Three years of PE ownership, but this was still fresh enough that he could see the operation with clearer eyes than someone who'd been there for 15 years.

He could make decisions that longer-tenured leadership might have talked themselves out of.

What This Teaches Us About Operational Excellence

Operational excellence isn't about continuous incremental improvement - though that matters too.

Sometimes, operational excellence is about having the courage to make discontinuous changes.

It's about seeing the business not as it is, but as it could be. And then having the stomach to close that gap, even when the path involves difficult decisions.

Here's what made this work:

First, comprehensive thinking. They didn't just cut costs. They simultaneously improved procurement, won new business, and streamlined processes. The operational changes were part of a broader strategy, not a standalone cost-cutting exercise.

Second, commitment. They went all the way. No half-measures. They restructured to where they believed the business should actually operate, not to where it felt comfortable.

Third, timing. They made these moves from a position where they could afford some short-term disruption. They weren't in crisis mode. They were being proactive, not reactive.

Fourth, follow-through. The operational changes created leverage, but only because the commercial team was simultaneously building a pipeline to take advantage of that leverage. The pieces worked together.

The Question for You

Think about your own operation, or the businesses you work with:

Where is there obvious inefficiency that everyone sees but nobody wants to address?

What decision do you know needs to be made, but you're avoiding because it's uncomfortable?

If you could restructure your operation from scratch today, with no legacy baggage, no historical relationships, no organizational politics - what would it look like?

And what's stopping you from moving toward that vision?

I'm not suggesting that dramatic workforce reductions are always the answer. Every situation is different. Every business has its own context, constraints, and considerations.

But I am suggesting that operational excellence sometimes requires courage more than it requires analysis.

We often have the data. We know what needs to change.

The question is: do we have the conviction to actually do it?

I'd be curious to hear your perspective. Where have you seen this kind of operational transformation work? Where have you seen it fail? What separated success from failure?