Business owners always thinking 'we gotta cut expenses' . What is an example of too much 'cutting expenses'?

When a company cuts expenses to the point that upper management thinks it can still show a profit without any actual income.

1.  Locking away the cheapest Bic pens in a storage closet and sparingly doling them out as if they are priceless pearls.

2.  Firing the front line people who do the bulk of the work and keeping on managers who are only in their jobs because of who they know, not what they can bring to the table.

probably when they cut into healthcare