To know that the times are tough is to be realistic. It should go without saying that no one wants to be in hard times, but this is just the way it is. In view of this realism, I think there are several points a good manager must consider.
First, a great manager needs to take care of his people. In tough times this is especially so. Therefore, the manager must communicate to his or her workers what is going on and what to expect. In this way, the workers will be in the know and plan accordingly.
Second, in a tough market, a good manager must cut all the excess. A good manager will know what to cut out without necessarily hurting the morale of the company. Also a good manager will have a list of what to cut out first and cut out last. In other words, there is a priority.