Hi Dirk,
Thanks for the response with a detailed answer. Very informative. We have decent number of redirects from homepage and top tier pages too. So I decided for this activity.
Regarding "auto redirects", we have redirected tens of links these days in the process of link reclamation to increase the back-links and pagerank/da. But we have significantly dropped post such redirects even though we have cross examined to make sure the incoming links are relevant to current pages we are linking. However, those external links were pointing to our pages in past. But as we deleted many pages in process of website redesign and content update, we replaced such pages. Why actually they consider such as soft 404 even we redirect non-existing pages to almost same pages with high relevancy? I think some of the links we reclaimed are kind of spammy and pushed us down. What's your idea on this. Thank you.
-Satish