34 Worst Decisions Made By Large Companies That Nearly, Or Did, Shut Them Down

Sears hired an Ayn Rand loving ultra-capitalist that hated the idea of a planned economy so much that he made the internal departments at Sears compete with each other, and it completely destroyed the company. Let me say that again: He made different departments of the same company compete with each other and it DESTROYED a 120 year old company. His name is Eddie Lampert, he also destroyed K-Mart, and he is studied for just how stupid of a CEO he is. Everyone should read about him

Eastman Kodak’s decision to not get into digital come to mind

The venerable Encyclopedia Britannica had ample warning that the world was going digital, but they didn’t want to cannibalise sales of the print encyclopedia, so when they finally and reluctantly offered the encyclopedia on CDs, they charged $1500 for it and made the brilliant decision to make it text-only. I worked with the guy who made that decision. Everyone hated him.

Pyrex letting whoever wants to slap their name on something as long as it is lowercase pyrex do so seems to have tanked the business hard. Basically made their brand unreliable because the lowercase p stuff is usually not heat resistant like uppercase P stuff is.

Rubbermaid. Walmart made them lower their prices so much they went bankrupt. Someone bought the trademark. I believe Walmart is the reason lots of smaller companies went under in the late 90's early 2000's.

Circuit City when they decided to fire 3400 seasoned employees and replace them with high school kids (who will work for less) thinking it was a smart business move.

Netscape is a great example of why you don't just rewrite software from scratch. Was the most popular web browser and they decided the code was ugly and messy so they should rewrite it. After the rewrite, they realized the reason it was so ugly and messy before was because of all the bug fixes. The new release was buggy and the rest is history, now hardly anyone even remembers the name.

I bring this up every time a software engineer wants to rewrite from scratch, because as ugly as code can be, it is usually on account of all the issues that have been fixed along the way.

When Photobucket decided to take the whole internet hostage by asking for 400$ a year for what was previously a free image storage solution. The move broke years of forums posting and erased a significant portion of the web collective knowledge.

I have to think about Toys R Us. They outsourced their online store to Amazon, who turned into their competitor.

Borders Books - I was in the meeting when they decided the way to solve their terrible online sales was to outsource it to Amazon. They were gone inside of 30 months.

Radio Shack trying to compete with Best Buy in bigger ticket consumer electronics rather than sticking to what they did best. I worked there in the early/mid 00s and you could feel the downfall as it was happening.

Holden Day. Law firm in Toronto. Every year, one of the partners would show the new articling students how strong the exterior glass was on their office tower by hurling himself against the floor to ceiling windows in a boardroom. It was a stunt that he thought would break the ice or something. One year, the glass gave way and he fell 30 storeys to his death. The firm never recovered, and wound down shortly after that.

Bethlehem Steel..CEO threw lavish parties from workers’ pensions. That was the beginning of the end for a once great company. My grandfather was one of many hardworking steel workers that lost his pension due to a bad CEO and a board that didn’t care. Seeing the cement hq being taken down in one glorious implosion was a true sight after it stood like the tower of Sauron in the middle of a forest for decades

Hoover UK offering two free flights to the US (worth £600) to anyone buying £100 of Hoover products in 1992. They were relying on people spending a lot more than the minimum and a tedious application process putting off most people. Customers just saw it as £100 flights to the US with a free vacuum cleaner. They tried to re-neg on the deal but were forced to carry on under the threat of lawsuits. It crippled the company financially, they never recovered and were eventually sold off to a competitor. 

A radio station i used to listen to recently changed their format from 80% music, 20% talk show to 100% talk show. Then they were like “oh you can still listen to the music but it’s only going to be on our app.”

Sears refused to expand into e-commerce despite them fully having the capacity to do so in the early 2000s. Same could also be said of Blockbuster and their refusal to embrace streaming video.

Schlitz beer once tried to increase their bottom line by using cheaper ingredients.

Result: poorer quality (including a slimy mucus at the bottom of the bottles), which in turn caused sales to drop hard. They reversed back to the old ingredients, but the customer base never trusted them again, and Schlitz died off.

RIM thought iPhone were no threat to the more business oriented Blackberry.

Smile Direct Club was pretty recent. Essentially from my understanding, an employee accidentally received an email of all the salaries in the company who then decided to forward it to the rest of the company. A lot of people realized they were getting underpaid and screwed over and essentially mutinied and quit.

A lot of shady stuff started to get leaked as well and lawsuits were just piling up. They didn’t have enough workers to meet demand to overcome expenses and they just shut down a few weeks ago.

Vine.

Vine was the Tik Tok of its day and then Twitter bought it and decided there was no profit in it.