CEO Ryan Cohen revealed that GameStop went from over 1,400 corporate employees to just 400, yet became more productive. He argues large corporate teams create bloat, perverse incentives, and delegation of work. The radical downsizing improved focus and business results.

As companies scale, the supply of obvious, valuable work dwindles. To stay busy, employees engage in "hyper-realistic work-like activities"—tasks that mimic real work (e.g., meetings to review decks for other meetings) but generate no value. It's a leader's job to create a sufficient supply of *known valuable work*.

The most significant productivity loss isn't inefficient work, but entire pockets of the organization doing very little. In one case, a 13-person team did just enough to create the *perception* of work for three years post-acquisition. This highlights a massive, often invisible, drain on resources.

After nearly failing, OpenGov adopted a frugal culture and discovered it grew faster. Less spending reduces system noise and inefficiency. A leaner, more focused sales team, for instance, can become more motivated and effective, leading to better results.

Upon joining, a new marketing leader at Common Room cut the marketing budget in half by eliminating low-impact activities like a generic content agency and events. This freed up resources to double down on promising areas, resulting in a 30-50% pipeline increase the following quarter, proving that strategic cuts can fuel growth.

Inside Instagram, engineers frequently discussed a thought experiment: if half the company vanished, would things improve? They often concluded "yeah, maybe." This reveals a deep-seated belief among product builders that organizational bloat, communication overhead, and excessive code were creating more problems than the extra headcount was solving.

If a company culture has become bloated and mediocre, laying off 50% of the staff just leaves you with a smaller mediocre company. The 'A' players have likely already left. The only way to truly fix a deeply ingrained mediocre culture is to fire almost everyone and rebuild from the ground up.

Businesses continue ineffective activities out of habit, guilt, or misguided optimism. The most potent strategic move can be subtraction. Explicitly naming these legacy tasks (e.g., a dead service line or a useless social channel) provides the permission needed to eliminate them and refocus valuable resources on what works.

Founders often mistake revenue for profit, continuing to offer services or serve clients that lose money once all inputs, like labor, are considered. Eliminating these revenue-positive but profit-negative areas is often the counterintuitive key to unlocking significant growth in the truly profitable parts of the business.