Today's announcement that WAG is cutting 1,000 management jobs seems to exhibit classic human behavior: overextend when times are good and overcontract when times are bad. I have personally experienced these cycles, wondering "what was I thinking?"
But WAG is not my small business and would seem to have better controls in place. I have long admired WAG with their corporate motto of "crawl, walk, run," which embodies a sure-footedness and a preference for organic growth. WAG has not had a history of making acquisitions because they did not fit the existing culture. The result has been steady, quality performance.
What to make of this pruning? It would indicate either WAG has changed strategies or lost control during the fun times. Neither is good. Personally, as an investor, I would rather see earnings take a hit and maintain organic focus than do the slash and burn routine.
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