Since I left my old company, a total of 4 other engineers have also turned in their two weeks notice. This makes a total of 5 out of 12 engineers. That is a lot of employees. Everyone who leaves says that the people were great, but they had to go because morale is just too low. So how can you boost company morale?
One way is to HIRE MORE PEOPLE! First thing you have to do is to let the employees know that the COMPANY is invested in them and wants to help them succeed. This doesn't mean providing cake every month, or paying for training. Those are obviously nice things to have, but more immediately, it means hiring the right people to join the team. If the company started hiring more people, then they might feel like there is a chance of a turn-around. They would feel that the company is investing in them and is willing to take a hit in the short term to produce profits in the long term.
My old company has been running a skeleton crew for the last 2 years. Over 1 year ago, an engineer left... and he has not been replaced yet. I left over 2 months ago, and my position has not been replaced yet. None of the positions vacated by the other engineers has been filled either. This is very demoralizing for the people who are left. Can you imagine walking into an office that was once bustling with people, but is now only left with mostly empty cubicles? Can you imagine the desolate situation of having to pick up the projects and workload of 3 other people? Everyone who leaves feels like they see no long term future in the company.
Second thing a company can do to boost morale is to let the employees know the WINS. For example, let the employee know if that project they were working on has landed in a big sale. Let all the employees know if we land a big contract. My old company never did this. The engineers were always kept in the dark, and never knew whether or not our work made a difference.