Comment by tsimionescu

Because the board doesn't understand the business at the level that employees do. Or because the board has different goals for the business than employees do. Or because the board is filled with friends of the CEO who let them do whatever.

Also, lots of companies reduce salaries or headcount if they feel they can get away with it. They don't need to be in dire financial straights, it's enough to have a few quarters of no or low growth and to want to show a positive change.