Lincoln Electric headcount reductions

One of the best examples of how to align the incentives of employees with the goals of the organization is Lincoln Electric.  I show a 15 year old video (Lincoln Electric 11-08-92, distributed by Ambrose Video Publishing, Inc., 800-843-0048.), and students invariably ask how they are currently doing. Despite the downturn, their recent financials look great. 

For example, we began to implement headcount reductions and reduced work schedules throughout our global operations in the latter half of 2008, and improved our purchasing practices to take advantage of lower raw material costs. Further, on February 2, 2009, we announced a 10% global workforce reduction for annualized savings of approximately $80 million, a minimum of $20 million reduction in capital expenditures, a freeze on salary increases and external hiring, and a base pay reduction for all executive management. These actions will help to further lower our cost structure and better align our business to the current weak economic conditions.