My late father worked for Morton Salt for close to forty years. Then Morton got a new 38 year old CEO and he wanted to shake up the company. He figured out that the employees over 55 years old tended to be the highest paid and if he got rid of all of them it would goose profits and he'd be a hero to Wall Street so he did it.
For a quarter or two it worked and then the company descended into a death spiral and he was fired. My Dad got another good job and did OK. Poor Morton Salt never recovered, they've been sold a half dozen times and aren't even the largest salt company in America anymore.
There is definitely a problem with MBAs who come in to companies and obsess about one or two statistics or numbers and reorder the business to maximize/minimize some metric but it destroys the business in the process. Another example is the Sears CEO Eddie Lampert.
It's a shame because Morton Salt sounds like it was irreparably harmed which is a huge cost for a lot of people (jobs and profits lost) but the CEO at worst just loses their job after a couple years if they hadn't moved on already.
You can't take a top performer with decades of success in a company and replace him with a 22 year old, even an exceptional one, and not have problems.
There's a reason that company's layoffs usually affect those with the least time there, because its the least harmful strategy. Surprised that fact isn't part of the MBA curriculum.
This happened in the late seventies. Nowadays you'd have a hard (though not impossible) time doing it because of federal laws against ageism. However the tech industry seems to get away with it in hiring.
For a quarter or two it worked and then the company descended into a death spiral and he was fired. My Dad got another good job and did OK. Poor Morton Salt never recovered, they've been sold a half dozen times and aren't even the largest salt company in America anymore.