1) It’s much easier to be a CEO in a strong economy.
Actions like this are *really* hard, but necessary for survival with travel demand down over 80% - worse than the global financial crisis and 9/11 combined.
2) Good CEOs cut early, cut once and cut appropriately.
This is hard to do as "expenses" are a euphemism.
"Expenses" are real people with real lives, with real bills to pay and with real families to support.
3) Cutting early and appropriately is also more compassionate than cutting later because the later the cut, the bigger the cut has to be. And the earlier it is, the easier to find new jobs.
Cash burn is an area under the curve problem not just a point in time
4) Other CEOs wait to cut expenses until it is too late and have to cut even deeper as a result.
Not only does this risk the survival of the company and ALL remaining employees, but it is much harder for the laid off employees to find new jobs later in a recession.
5) This dynamic really advantages the companies with good CEOs who acted swiftly.
They come out of the recession with more employees, more cash and more resources to grow and hire again vs. the companies that waited to cut expenses. Some of which will go to zero.
6) As perspective – all major hotel chains are furloughing a much higher % of their employees than this.
And this economic "hard stop" will extend far beyond the travel industry.
All CEOs are going to have make hard decisions in the next several months to survive.
7) Great companies will survive this. Great new companies will be founded.
You can follow @GavinSBaker.
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