Buffett and Munger's views on downsizing · Transcript · BuffettMungerGPT

WarrenHistorically, you know, every industry at all times is interested in downsizing or becoming more efficient. Now, if the industry is growing, you can achieve efficiency by doing more work or turning out more output with the same people. But, you know, if you go back 150 years and look at the percentage of people in farming, for example, farming has downsized from being a very appreciable percentage of the American workforce to a very small percentage. small percentage and essentially that's released people to do other things. So it's in the interest of society to get as much output in anything as it can per unit of labor input. It's very difficult on the individual involved and, you know, it's no fun, I guess it's no fun being a horse when the tractor comes along or a blacksmith and when the car comes along. But the, the, so I don't, I don't quarrel with the activities. I quarrel sometimes with how it's done, and I do think there's been a certain lack of, in certain cases, some empathy or sensitivity in terms of the way it's being done. You should try to make your businesses more efficient. We hope we're not in businesses that will require us to lay off people. over time because we hope that physical output grows and that that we become more productive and can keep the same number of people to get greater output. Well, if you put it in reverse, you would say, name a business that has been ruined because it was over-downsized. I cannot think of a single one, but if you ask me to name businesses that were half-ruined or ruined, or ruined by bloat. I mean, I could just rattle off name after name after name. It's gotten fashionable to assume that downsizing is wrong. Well, it may have been wrong to let the business get so fat that eventually had to downsize. But if you've got way more people than are needed in the business, I see no social benefit in having people sit around on half-employed or unemployed.