By fostering trust, involving the team and balancing practicality with empathy, you can mitigate demoralization while achieving cost goals. The key is to act as a united front, not impose top down cuts.

Cutting costs doesn’t have to mean cutting trust. I believe in radical transparency , openly sharing why changes are necessary and how they position us for future strength. Instead of blanket cuts, I focus on smart prioritization: protecting roles, investing in skill development, and trimming non-essential expenses first. I involve the team early , crowdsourcing ideas for savings, recognising small wins, and reinforcing that everyone’s effort matters. Above all, I double down on purpose — reminding the team that we are not shrinking; we are sharpening to go further, together. That mindset makes all the difference.

Your team’s first fears are simple. “Am I safe?” and “Is this business in trouble?” If you don’t address those fears early, you lose trust and momentum. Move fast, but smart. Cut anything non-essential to service or revenue. Kill the nice-to-haves. It shows you’re in control without putting people in the firing line. Then, face the team. Be straight. Here’s what’s happening. Here’s why. Here’s what’s safe and what’s not. Let them find savings. People fight for what they help build. Sometimes it’s not about cutting but spending smarter. Maybe it’s time to invest in tech or support that saves hours and lifts standards. Move fast. Stay clear. Stay focused. Be ruthless with waste but careful with the core that still has to carry you.

One thing I have found helpful is to be clear and transparent why you are doing these changes and explain the expectations on the coming period. Show the team how you will balance their workload and provide the support required for them to deliver the results. A very important part is to share with your outside network and to support the staff who are affected with a replacement jobs if possible, this will give positive results to all the team.

In luxury hospitality, I believe cost optimisation is never just about reducing numbers. It is about preserving the guest experience while protecting the team, especially during challenging periods. Involve HOD and look at different scenarios together. Ask them what they would do with less budget if it were their own business or their own bank account. What can be adjusted without compromising quality? Can something be postponed? What would you prioritise? Smarter scheduling, sharper forecasting, removing inefficiencies? Be clear and honest. People do not need things sugar coated. They need to understand what is happening and why. When you bring them into the process, they stay involved. They take ownership and feel respected.