Our costs are out of control claimed Rosemary Harper chief financial officer of Broadway United. “In particular, I am really concerned about the level of marketing costs, especially for sales force. With a 235-person sales force, Broadway sells computer hardware and software packages to financial institutions. Harper supports the recommendations of a sales consulting firm to reduce the sales force by 50% and to hire a new “sales force” consisting of manufacturer’s agents who would be paid on a straight commission basis. The reduction in the sales force would mean that 10 district sales managers would lose their jobs. The sales training manager position would be eliminated as well since manufactures agents do not need training according to the sales consultant. Harper intended to keep only the best sales reps and eliminate the others in the 50% reduction process. “Those experienced sales reps that remain with Broadway will not need enough training to justify keeping Broadway’s training department,” noted Harper.
What are the advantages and disadvantages of the sales consultant’s proposal?
Is it possible for company to cut costs too far?