When operating at thin margins, if those margins disappear the only way to stay afloat is to cut costs. The "easiest" way to cut costs quickly is to reduce your

When operating at thin margins, if those margins disappear the only way to stay afloat is to cut costs. The "easiest" way to cut costs quickly is to reduce your labor force. It is much harder to cut operational costs like buildings and infrastructure without incurring extra cost or taking a big loss. This is one reason why operating a high margin, low cost business is probably better for both the owners and the employees.