This week we have read news of two corporate giants taking strides to rein in their operating costs amidst challenging business conditions.
2014 was an annus horribulus for Tesco as the grocery giant battled a string of profit warnings, declining like-for-like sales and the controversies surrounding mis-reporting of profits. Their new CEO has announced the shelving of many new larger stores, the closure of others (including those built but never opened) and the disposal of non-core assets such as Blinkbox.
The final dividend to shareholders has been dropped in a bid to build up a larger buffer stock of cash. It is a classic example of a business that has grown too large; an unwieldy business facing severe competition from the fast-growing deep discounters such as Aldi and Lidl.
Coca Cola has also announced well over a thousand job cuts in the wake of sluggish revenue growth and declining profits. I was staggered to read that they employ over 130,000 people worldwide!
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