> No, you can't increase your overall productivity after cutting 80% of your workforce. You might increase individual engineer productivity slightly

Labour productivity is already a per worker measure. I've never heard it used to refer to anything else.

That seems to be what they're referring to when they say they can increase productivity by cutting workers and working the rest much harder.

I'm pretty sure that's bullshit and the sheer amount just daily maintenance and fire fighting will annihilate any possible productivity gains, so I agree with you.

Yes you talked about economic definition. You are 100% right....as right as Paul Volcker with his economic theory. But at corporate c level we discuse productivity with another unit attached....money.

You can. It is called outsourcing. Seen it. Done it. Everytime, productivity increased! It os only when employees retaliate and government intervention then there is some cost involved to mitigate that. But still productivity is high (as in using the same amount of money to get more widgets and revenue in the same amount of time). You might be young say under 30s. Look back since the Nafta treaty signed in the 90s. There is enough evidence to back me on this productivity/revenue increase for the companies. For American, of course painful layoff.

This is completely orthogonal: the reason companies outsource is to purchase more labor for the same price.

There are plenty of industries where the economic envelope favors cheap human labor. But this in no way implies that you can cut 80% of your staff and get the remaining 20% to do both their own work and everyone else’s.