The Efficiency Mirage

Newell Brands and The Dark Side of Portfolio Optimisation

In boardrooms and investor meetings alike, there is a well-worn narrative that plays to the desire for control amid complexity: shrink to grow. The logic appears sound. Reduce the noise. Cut the excess. Focus the business. Improve margins. Let profitability lead the way. For a time, the results can be compelling—especially on paper. Gross margins expand, cost structures lean out, and the language of “structural economics” starts replacing talk of volume and velocity.

But what if that story conceals more than it reveals?

Newell Brands offers a cautionary tale. Between 2022 and 2025, the company underwent a sweeping operational transformation. Management consolidated supply chains, restructured business segments, and implemented deep headcount reductions. These moves achieved what they promised: significant margin expansion and efficiency gains. But revenue continued to decline, core volumes remained under pressure, and by 2025, the company’s credit rating was downgraded to junk status. Shrinking had made the business leaner, but not stronger.

This is the efficiency mirage: when cost cuts and structural fixes are mistaken for strategic progress. It reflects a growing trend across mature consumer goods companies: treating efficiency as the destination, rather than a means to restore growth fundamentals.

This article explores why shrinking, in isolation, can be dangerous. It examines how Newell’s journey exposes the limits of structural optimisation when not paired with renewed demand generation. And it asks a critical question for corporate leaders and investors alike: when is shrinking just a slower path to decline?