Business Penny-Pinching Adds Up

ByAndrew E. Serwer

May 23, 2001 -- The American Airline olive has become business lore.

In the 1980s, Robert Crandall, then head of the airline, cleverly calculated that if you removed just one olive from every salad served to passengers, nobody would notice … and the airline would save $100,000 a year.

The booming economy of the '90s gave rise to bigger and better perks for both employees and customers. But, as the economy cools, companies are heeding Crandall's penny-pinching advice — looking for their own ways to cut costs.

United Airlines, for instance, recently got rid of those "refresher" towels on most short journeys, cut back on in-flight videos and removed grapefruit juice from its bar menus — it's less popular than orange juice — as part of an overall $200 million cost cutting program.

And it's not just the airlines tightening their belts.

Cost-Cutting Gets Creative

Student Advantage, a direct marketing company in Boston, asked employees to use the pens and paper the company stocks in bulk, and drink filtered, not bottled, water. Total savings? About $100,000.

At the American Standard plant in Tyler, Texas, it's the doormats in the entryways — now they just get vacuumed instead of sent out for cleaning — and that saves the company $70,000 a year.

Some of the other common cost-cutting measure include no more Snapple in the company fridge or fresh fruit in Fortune magazine's kitchen. Time Inc. has folded its 60-year-old in-house newsletter FYI. So far the firm has saved hundreds of thousands of dollars on the newsletter alone.

A broker at Salomon Smith Barney in Chicago said they used to have Starbucks coffee on English china. Now both the coffee and the china are gone. And fellow financial Goldman Sachs has been cutting back on providing cars for its analysts who stay in the office late at night.

Canon saved over $50,000 using recycled furniture when it expanded an office. The New York Times didn't provide goody bags for girls on Bring Your Daughter to Work Day.

The folks at Xerox did the math and realized that charging a quarter for coffee could save a co-worker's job. The fancy crystal performance award is now a box of chocolates. And recently, Xerox created an "adopt a plant" program. Employees do the watering instead of a watering service, saving Xerox $200,000 a year.

Overall, employees don't seem to mind. Pamela Moses, a Xerox employee, says, "we know that we need to do these things, we want the company to turn around and we want to help in every way we can. It's as easy as that."

And for now, the company whose name is synonymous with photocopies has asked employees not to make so many.