Economic downturn: Should you cut your sales team?

Lately, in conversations with CEOs from very different industrial sectors, one recurring question keeps coming up. In a strained economy, with tighter budgets and growing margin pressure, should companies cut back on their sales teams?

Let’s be clear: reducing headcount in sales can be the right move. In some cases, it’s even necessary, to streamline an overly complex structure, disengage underperformers, or reallocate resources to key strategic markets. In the context of insolvency or restructuring, it can even unlock long-stalled decisions. But when that decision is made without proper support, without a follow-up plan, and without a clear internal and external narrative, the short-term gains can quickly be outweighed by long-term, silent, but very real, consequences.

Behind the numbers, a different dynamic

Let’s look at companies that have already taken action. Some executives told me they based their decision on the data: declining conversion rates, high commercial costs, limited ROI on certain segments. On paper, it all made sense. And yet, a few months in, they started noticing effects they hadn’t anticipated: slower buying cycles, fewer repeat orders, declining customer engagement, and even doubts from clients about the company’s long-term presence. In one industrial SME, cutting three out of seven sales roles preserved gross margin in the short term. But six months later, the active customer portfolio had lost over 10% of its value. Not through backlash, but through quiet disengagement. In a mid-sized company, choosing not to replace departing sales reps, while keeping targets unchanged, resulted in team overload and unexpected resignations. These are not management errors. They are secondary effects of a legitimate, but incomplete, decision.

Before cutting: reframe priorities, rebalance the system

Now let’s flip the perspective and talk about the leaders who considered cutting, but chose instead to transform. They started with questions like: What is our sales force actually here to do? Are they set up to convert, retain, prospect, or expected to do it all, without a clear framework?

This type of diagnostic often reveals alternative paths to blunt reduction:

• Rethink account coverage and reprioritize segments

• Clarify roles between sales, customer service, and marketing

• Streamline tools and processes that create friction

• Identify untapped potential blocked by poor structure

  
  

What started as a reduction plan turned into a realignment strategy, and delivered better long-term impact, both on revenue and team engagement.

And if reduction is the right path, then own it fully

Sometimes, reduction is the only viable option. That’s not a failure, it’s a leadership choice. What matters most is how it’s done: the clarity, the structure, the follow-through.

The companies that handled it best:

• Anticipated internal impacts (workload, morale, cohesion)

• Communicated clearly about the reasons and objectives

• Put in place interim solutions (fractional roles, outsourced sales)

• Redefined sales priorities to focus effort where it mattered most

Downsizing is never neutral, but it can be a responsible management act when framed in a clear, forward-looking strategy.

Reduce, but never blindly

So, the real question isn’t should we reduce or not? It’s: why are we reducing, how are we doing it, and what outcome are we targeting? This isn’t just about internal structure, it’s a message to your team, your clients, and even your competitors.

In a storm, some companies cut back to survive. Others cut to pivot. But the strongest ones keep a clear long-term vision, even when they have to trim the sails. And in that equation, the sales function should never be treated as just a cost line. It holds the keys to customer trust, market understanding, and future recovery.