Cost cutting refers to the process of reducing expenses to improve profitability or financial stability. Businesses often implement cost-cutting measures to streamline operations, eliminate waste, and enhance efficiency. This can involve reducing staff, renegotiating contracts, or finding cheaper suppliers. Organizations may also focus on cutting costs in specific areas, such as marketing, production, or administrative expenses. While cost cutting can lead to short-term savings, it is essential to balance these measures with maintaining quality and employee morale to ensure long-term success.