Short-Term Profits, Long-Term Collapse: The Human Cost of Labor Cuts in Retail

By Violet Nance

Abstract

Labor reductions are a common strategy employed by retailers to manage costs and enhance profits. While these cuts may seem effective in the short term, they often compromise employee well-being, customer satisfaction, and operational stability. This essay focuses on Dollar General as a case study to explore the deeper repercussions of understaffing, including diminished morale, higher turnover rates, safety violations, and damage to the company's reputation. By comparing similar outcomes at other retailers, such as Joann and Party City, the need for sustainable labor practices in the retail sector becomes increasingly evident.

Short-Term Thinking and Profit-Driven Cuts

In an industry characterized by razor-thin margins and aggressive growth, the temptation to cut labor costs often presents itself as a quick fix. According to Karp (2023), Dollar General shifted $100 million from its labor budget to facilitate the expansion of its store count in 2023 alone. While this strategy may have bolstered earnings and pleased shareholders from a purely financial standpoint, it has come at a significant operational and ethical cost...

Labor should never be viewed simply as a line item on a budget; it is the very backbone that supports the intricate tapestry of retail operations. When businesses choose to slice staff hours, merge roles, and rely on a dwindling number of employees to shoulder the weight of additional responsibilities, they invite a cascade of challenges. This misguided pursuit of efficiency breeds burnout, leaving workers weary and disengaged.

The façade of a streamlined operation crumbles swiftly as disarray takes over the shelves, customer complaints flood in, and crucial tasks languish in delay due to a shortage of hands. What was once a vibrant shopping experience becomes marred by chaos, with each neglected duty echoing the toll of an overburdened workforce.

Dollar General as a Case Study in Collapse

Dollar General’s model relies on minimal staffing, with some stores operating with only two employees for entire shifts (OSHA, 2023). This under-resourcing has led to repeated safety violations, including blocked exits and hazardous stock levels. Since 2017, the company has been fined over $21 million by OSHA for preventable infractions directly tied to understaffing and unsafe working conditions (U.S. Department of Labor, 2023).

Employees report unsustainable workloads and a lack of support. Online forums reflect widespread dissatisfaction, with some stores experiencing such high turnover that dozens of team members cycle out within a year. Comparably (2023) ranks Dollar General in the bottom 10% nationally for employee retention and workplace satisfaction.

Despite these realities, expansion continues unchecked. The disconnect between corporate optimism and ground-level operations reveals a company chasing growth at the expense of its people—and its infrastructure.

Retail Industry Echoes: Joann and Party City

Dollar General is not alone. Joann Fabrics, once a household name for crafters, filed for Chapter 11 bankruptcy in 2024, announcing the closure of 800 stores and layoffs affecting 19,000 employees (PYMNTS, 2024). Party City similarly shuttered 700 locations, citing financial instability following years of labor cuts and underperformance (Bomey, 2024).

These collapses showcase a pervasive trend: unsustainable business models that prioritize immediate cost-cutting over essential operational investments. Often, staff reductions come first, setting off a domino effect that tarnishes customer satisfaction and dwindles sales. This downward spiral frequently culminates in bankruptcy filings and the grim initiation of liquidation plans, underscoring the dire consequences of short-sighted financial strategies.

The Human Toll of Cost Management

While spreadsheets may highlight savings, they rarely capture morale. A 2025 Logile survey found that 77% of retail associates link poor scheduling and understaffing with lost sales. Furthermore, 83% reported feeling overwhelmed, and nearly one-third considered quitting due to erratic schedules and understaffed environments (Logile, 2025).

This isn’t just inefficient — it’s dangerous. Employees in understaffed stores face higher rates of injury, verbal abuse from customers, and psychological strain. By prioritizing short-term profits over long-term viability, retailers risk more than their reputation; they jeopardize lives.

As a salaried store manager at Dollar General, I wasn’t just responsible for operations — I was expected to absorb the fallout when labor budgets fell short. When staffing hours were reduced, the math didn’t change: the freight still arrived, the audits still came, and the customers never stopped. Corporate may have trimmed the payroll ledger, but it didn’t trim expectations. It simply passed the burden to salaried managers like me, who routinely stayed late, worked through weekends, and handled safety risks on their own, because there was no one else. We were told to “make it work.” But what we were actually doing was masking the cracks in a system designed to break under pressure. It wasn’t cost-effective. It was exploitative.

Conclusion

Labor cuts may serve quarterly earnings reports, but they erode the integrity of retail operations. Dollar General’s example, alongside the failures of Joann and Party City, makes one point clear: companies that hollow out their workforce hollow out their future. Employees are not liabilities — they are the backbone of every transaction, every smile at the register, and every shelf that gets stocked.

Retailers must reevaluate their definition of efficiency. Real cost management involves investing in people, not excluding them from the equation. Profit at the expense of dignity will always collapse under its own weight.

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