To reduce business expenses or expenditures through various methods such as eliminating unnecessary spending, renegotiating contracts, or improving operational efficiency. The goal is to decrease outgoing cash while maintaining quality and productivity.
The phrase combines 'cut' from Old English 'cyttan' with 'costs' from Latin 'constare.' The metaphor of 'cutting' expenses like pruning branches became common in business language during the Great Depression when companies needed to reduce spending quickly.
Smart cost-cutting focuses on eliminating waste rather than valuable activities - it's about efficiency, not just reduction. Companies that cut costs strategically often emerge stronger, while those that cut indiscriminately may damage their long-term capabilities.
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