{"id":2970,"date":"2025-09-02T10:45:40","date_gmt":"2025-09-02T08:45:40","guid":{"rendered":"https:\/\/arthur-hunt.hu\/2025\/09\/02\/strategic-decisions-in-a-stagnant-economy-beyond-downsizing\/"},"modified":"2025-09-02T10:45:40","modified_gmt":"2025-09-02T08:45:40","slug":"strategic-decisions-in-a-stagnant-economy-beyond-downsizing","status":"publish","type":"post","link":"https:\/\/arthur-hunt.hu\/en\/2025\/09\/02\/strategic-decisions-in-a-stagnant-economy-beyond-downsizing\/","title":{"rendered":"Strategic Decisions in a Stagnant Economy \u2014 Beyond Downsizing"},"content":{"rendered":"

Economic Situation: Stagnation and the Need for a New Mindset<\/h3>\n

According to the government\u2019s latest macroeconomic forecast, GDP growth in 2025 is expected to be only 1%, far below the previously anticipated 2.5% [1]. After stagnation in the first half of the year, growth in the second half is likely to reach only 1\u20132%. In this environment, mere cost and headcount reductions are not enough \u2014 true competitive advantage comes from reviewing, improving, and adapting the company\u2019s efficiency and business model to changed market circumstances.<\/p>\n

The National Bank of Hungary\u2019s inflation report notes that employment has so far remained relatively stable, but future demand for labour now depends mainly on economic performance. Should growth fall short of expectations, demand for labour may decrease significantly.[2]<\/a>.<\/p>\n

At the same time, signals are already apparent at the organizational level: wage dynamics are slowing, organizational tension is increasing, and \u201cquiet departures\u201d have begun. The latter is especially typical among the most valuable employees, who are less inclined to wait in uncertain times. This uncertainty is affecting the entire labour market: employment is decreasing, the number of open positions has dropped, especially in manufacturing and market services. The first and frequent reaction to uncertain circumstances is to lay off contract workers, which has a particularly strong impact on manufacturing locally. Latest public data shows that in Q1, employment dropped by about 32,000 compared to the previous year, nearly 30,000 of these in manufacturing.[3]<\/a>.<\/p>\n

Persistent stagnation calls for a new approach: companies must make operational efficiency, business processes, and strategic agility top priorities \u2014 mere cost-cutting is no longer sufficient.<\/p>\n

Leadership Dilemma: It\u2019s Time to Act, but How?<\/h3>\n

In a slowing economy, leaders need to decide on more than just downsizing; the situation has become a strategic operational risk. Leaders must answer questions such as: Where does the organization waste resources? Which business units create real value? How can capacities be reallocated or new revenue streams explored?<\/p>\n

Downsizing alone delivers quick results, but if it is not aligned with a thoughtful, performance-based, and strategic direction, it will only erode morale and efficiency, and risk the loss of critical competencies.<\/p>\n

For long-term success, companies cannot afford a \u201cHR-lawnmower\u201d approach. The real solution is to optimize the entire business and operating model and actively search for sustainable growth opportunities \u2014 even in a stagnant market.<\/p>\n

Sustainable Operations as a Competitive Edge<\/h3>\n

Successful companies not only cut costs in the short term, but also transform their processes, rationalize resource use, and develop a sustainable operating model (Target Operating Model, TOM) that is adaptable for future market conditions. Key steps include:<\/p>\n