When your ability to make money hand over fist starts to get challenged, it is difficult to continue giving people free reign, especially when your competitors focus on cost, cost, cost.
That kind of thinking sounds like it would lead to a "race to the bottom" to me. If everybody is obsessing over - and competing on - a quest to cut costs the most and the fastest, I really don't see how anybody is going to benefit from that in the long run.
Or to put it another way: "You can't cost cut your way to a growing company".
Of course, I'm not saying there's never a time when circumstances change and some cost-cutting might be called for. But cost-cutting is a tactic, IMO, and not a strategy. Innovation, on the other hand, and committing to the activities that lead to more and better innovation, is a strategy.
My feeling: If you want to grow, you have to innovate. So if you reasonably believe that "20% time" is an approach that leads to useful innovations, then cutting it is a short-sighted, and arguably mistake, move.
Kind of a strange point on cost cutting, but how does this fall into the arguement of "paying for talent" when hiring your executive level vs "race to the bottom" point of view for your employees? I've seen this vomitous 180 flip of statement coming from the same company in a short timespan.
The top gets paid an exponential figure for 'talent', but is ignored in any cost cutting measure... yet, any purely non financial 'talent' sets you on a crash course race towards minimum wage of "Oh, you did awesome this year, but times are lean.. here is a 2% raise."
Maybe I am more irked now because the company I work for just got bought by a huge company and R&D staff was slashed in half and "No more research." became a mandate