When Cheaping Out Backfires: 25 Companies Who Paid a Hefty Price for Cutting Corners
Ever wonder how some companies manage to snatch defeat from the jaws of victory all in the name of saving a buck? It’s like watching a slow-motion train wreck where the engineers are busy debating which pennies to pinch while the whole darn train’s careening off the cliff. You might think cutting costs is smart business, right? But oh boy, when companies start juggling pennies and drop the big dollars, the results can be downright catastrophic—and wildly entertaining for the rest of us. From clueless management decisions that bleed millions to policies that backfire spectacularly, these stories showcase the art of trying to save a buck and losing a fortune instead. Grab your popcorn, because this collection of blunders is packed with schadenfreude served fresh from real-life companies that nailed the art of penny-pinching with all the subtlety of a wrecking ball. Ready to chuckle, cringe, and maybe learn a thing or two? <ahref="https://www.reddit.com/r/AskReddit/comments/11chfgc/whatdidyourcompanydotosavemoneybut_ended/”>LEARN MORE
Losing a dollar to save a penny seems like a supremely dumb business strategy unless you are trying to short-sell your own company. Which is also supremely dumb, since it’s pretty illegal. But short-sightedness is unfortunately as common as bark on a tree, and some people in upper management are experts in little else but shooting themselves in the foot.
Fortunately for us and posterity, internet users have gathered some of their experiences with companies trying to penny-pinch and paying the price for it. So get comfortable and read through this collection of policy backfires that are sure to induce some pleasant schadenfreude. Be sure to upvote your favorites and comment your own stories.
They hired newer employees at 25% more salary without adjusting old employees who had been there for years.
When this was found out they were told “life isn’t fair”, “the markets changed”, and “you didn’t negotiate well when we hired you”. So what did the old employees do? They left. And all the domain knowledge they built up over the years was lost so the new employees couldn’t perform.
Be loyal to your loyal employees. It’s a lot harder to replace them than people think.
Company ran a campaign for “outside the box” ideas in cost cutting, with stock awards for proven savings. Our facility maintenance manager claimed a $300k savings by eliminating unnecessary capital spare parts in the warehouse and received a $30k award.
Six months later a critical compressor failed resulting in the plant reducing to half capacity at a $500k per day profit loss. It would only take two days to repair, however, the parts were no longer in the warehouse. They were among those eliminated and sold for scrap. It took 90 days to receive replacements.
Total loss to our company was just over $50 MILLION.
We used to get a travel per diem for our meals. Most people would eat cheap like get a free breakfast at the hotel and get a $5 footlong and split it for lunch and dinner and bank the rest. I traveled a lot so it was like a nice perk. The company got wind of this and changed their policy to we had to buy and expense all our meals. The problem was they had to have the same policy for all employees so they couldn’t put a cap on meals due to the sales guys having to take out clients and stuff. We took full advantage of it and ate like kings. My meals expenses were twice what they were paying in per diem.
Refused to raise my pay to the same level as my coworker’s, not because of any difference in experience or workload but because he was five years older than me. I quit, at which point they realised that I had been handling a lot of my boss’ tasks and that my coworker and I had basically been doing the work of three people, so they had to hire two people to replace me. And then my original coworker got fed up and quit too.
I used to be the head of security for a club that had the most tight-fisted owners I’ve ever heard of.
I kept telling them that we were dangerously understaffed. The police told them the same. So did the fire brigade, they said there wasn’t enough of us to evacuate the venue if we had to, they were right too. The owners wouldn’t listen.
The club was taking around 45k per week but they wouldn’t pay for radios for us to least be able to communicate. We had so many incidents there that it was just insane. There just wasn’t enough of us to actually watch the whole club and even when we did see something we couldn’t call for back up. I found a set of second hand radios for under £200 but they refused to buy them I ended up buying whistles for the team to at least give us something to use to get each others attention.
They also wouldn’t pay to get CCTV installed which upset the local police.
