Looking at many of the 1q10 earnings reports, it seems like a huge chunk of the increases are due to higher operating leverage mostly due to lower labor costs per revenue, benefiting from the layoffs of last year (companies recognized a lot of layoff costs in 09). Now, I never studied too much on organizational theory but if one looks at the ten year averages, then these productivity levels seem unsustainable. Have companies been running fat for the last ten years? or will there be a need for massive hiring once (or if) revenue numbers start catching up, and will that reduce operating leverage. I dont have the resources to do the numbers for the market, perhaps someone already has done this research and the papers are floating around?