The Google Way

Recessions: A Time to Reorganize

During financial crises and recessions, companies reduce their costs, restructure, and streamline their organization. Some restructure because they are forced to; others restructure simply to take advantage of the situation. Two factors contribute to these moves:

• Employees afraid to lose their jobs accept measures they would have fought otherwise, such as pay cuts, reduced work weeks, and reduced benefits.

• The production slowdown gives firms the opportunity to invest in productivity-improving activities such as reorganization or training. As Robert E. Hall of Stanford University explains, "Measured output may be low during (recession) periods, but the time spent reorganizing pays off in its contribution to future ...