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This is conceptually simple but in practice is a terrible idea.
Departments already running lean are penalized and may dip below the minimum number of people they need to fulfill their core mission.
Corollary: Inevitably the small department that keeps the whole organization running will get thrown under the bus and sooner or later everything goes to shit.
Departments whose heads had the foresight to maintain appropriate blubber reserves chug along unaffected and wasteful. You'd need an 80% cut to start to make a difference.
I've seen this exact scenario play out in corporate cost cutting campaigns.
Selfish request: Please share an anecdote about this. I have a special fascination with corporate restructurings / cost cuttings / re brandings / org redesign.
Related anecdote:
My husband's employer provides various services to other companies, with different departments providing different types of services. They recently had a situation in which $Big_Client had contracts with multiple departments: dept. A's contract was making a ton of money, while dept. B's had over time become unprofitable in ways they were unable to remedy. The guys in A thought it was in the company's overall interest for B's contract to keep going, because A's profit was far larger than B's loss and they thought B continuing to provide their service helped keep $Big_Client well-disposed towards the company overall.
Top management, however, saw only that dept. B was not as profitable as they would have liked, and so that contract has recently been terminated. Only time will tell if this winds up harming dept. A's profits from that client.
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I don't want to give away too many details for opsec reasons.
However, the broad strokes are that I worked at a big company you've heard of. One day the top brass decided that the company has gotten too big and it's time to downsize. Naturally, top brass has no visibility into what parts of the company are load bearing and which are not, they can only tell which parts are cost centers and which are profit centers. So inevitably they lay off large portions of a few teams that are maintaining tooling that nearly every other (productive) employee at the company depends on to do their work.
The company hasn't gone out of business (yet), but there was absolutely a huge productivity hit for me because that tooling was no longer reliable and I needed to work around it somehow. Multiply that out by tens of thousands of employees and you can imagine the scale I'm talking about here.
In my department as well they laid off some of the top guys that were universally admired (and I'm not talking management, I'm talking about guys at the coalface). Meanwhile I was aware of people in other departments who accomplished as much in a quarter as I accomplished in a week (and I am not a particularly productive employee). They kept their jobs, because their bosses liked them and their poor performance was never a matter of record.
Of course, this is all perfectly illegible to the brass. From their perspective, they saved a bunch of cash - mission accomplished!
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Also I've never seen a "cheese slicer" budget cut like this (as they are called here) actually being enacted without the proposing party, right out of the bat, going "well, of course, this sector is the exception" (typically defense) followed by "and this too... and this..."
I think that would be a significant challenge for sure. The only way it works is if there are no exceptions. Not for teachers, not for our troops, not for Grandma who has cancer, none. I'm willing to grit my teeth as the things I care about get hit, but I don't think most Americans are.
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I'm not saying it's the best solution. I'm well aware it would have problems! But we absolutely have to stop racking up debt. The problems you mention are real, but less bad than the status quo.
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