I have a new tip for people who play the stock market or work for any company. When a company starts to fire the salespeople, dump the stock, update your resume, whatever you have to do, but get out while you can.

Why is it that when a company experiences a downturn, they look to cut the sales force? I know, they have to cut something, and why not go after the expensive sales people, the ones who use up the precious expense accounts. But when the salespeople leave, the customers are the first ones to see it and feel it. And when that happens, those customers start to look elsewhere.

I know of numerous industrial companies that took this route. They were usually companies that were led by engineers or accountants (especially accountants, I hate those guys). One company used to be a leader in their field, they owned it. Then an accountant took over, and the salespeople were cut. Instead of 8 people in Michigan, they were soon down to 1, and then none. That business was soon lost to competitors, but they cut expenses. This company still continues to cut it's salesforce, and still wonders why sales don't increase. They expand the product line, they improve margins, the close plants, and they wonder why sales don't go up.

Of course the people heading up these companies are then rewarded with rich contracts, or golden parachutes when they are fired. Yet they killed the company.

People still buy from who they like. Salespeople establish relationships, they put a face on your company. Hopefully they are well paid. They face rejection on a daily basis. They fix problems caused by others. They are on the road constantly, and for those who don't have to travel - be grateful. It sucks and it is not elegant or fun. They keep people employed.

So when you see companies that cut their sales force, get out. Sell the stock or short it. And if you are on a Board of Directors and you see it happening, and you let it happen, shame on you, shame on the CEO.