Corporate profit

[moneymaker]

When profitable companies layoff people is it basically corporate greed at work? Example Cisco, I don’t know much about them yet they seem to be profitable and are going to layoff 6000. Other past examples are Microsoft, B of A, Apple, Verizon, there are many other examples I’m sure. I’m seeing big companies laying off thousands while at the same time fueling up their corporate jets and thinking nothing of it. Disturbing to me but just part of reality I suppose.

[outtamojo]

When a division/department is no longer needed and is not of strategic importance what would those workers do? IOW, how would their continued presence benefit the company? I suppose they could offer jobs elsewhere within the company and retrain and keep the better employees but that brings on a whole new set of questions.
I do believe there should be some shared suffering between the executives and the rank and file though when there are layoffs -a failed endeavor is after all a reflection on management also and they should not be getting bonuses while the underlings get slashed. All imo of course.

[The-Shoveler]

[img_assist|nid=19811|title=Dilbert|desc=|link=node|align=left|width=100|height=56]

http://www.dilbert.com/2014-11-09/

Meat Plant

[moneymaker]

That’s a good one Shoveler. Dilbert is my favorite comic strip. I guess i missed that one, will have to visit the website to catch up. I guess http://www.dilbert.com/2014-11-10/ is appropriate as well.

[UCGal]

I’m glad I’m out of the rat race. My blood used to boil at huge salaries/bonuses/corporate jet expenses of our former CEO as he was cutting about 40% of the employees. But it’s not my problem anymore.

Had a friend laid off – just heard from my friend about it today. But it’s not the situation in the OP – they fired the CEO too. From what I hear – he’s a big part of the problem with that company.

http://www.utsandiego.com/news/2014/nov/10/Entropic-patrick-henry-broadcom-trident-MOCA/

[livinincali]

CSCO profit margin is 16% and it’s revenues have been flat for years now. Investors are demanding earnings growth and the company just can’t seem to generate it without cost cutting measures. I don’t think a 16% profit margin is that horribly greedy. I do think Cisco suffers from a lack of innovation though.

[EconProf]

Profits = revenues minus expenses. Companies naturally seek to increase profits. They can use various means to increase revenues or cut expenses. It looks like, for whatever reason, they could increase profits, or decrease losses, by letting go some of their employees. In other words, the contribution of those employees to the firm was not worth their pay. I don’t see a problem with that.
I’m sure they did not enjoy laying off people, but their job is to satisfy their customers and their stockholders, not be a charity.

[outtamojo]

Yeah but to lay off people because they aren’t worth their pay means at some point someone did feel they were worth their pay and the decisionmakers were wrong to think that. The people who were wrong need to pay the price for their error – as a shareholder/owner that is what I demand and I see too often only the rank and file suffering.

[Anonymous]

There’s a reason why hiring and firing is done by the part of the organization called Human Resources.

If certain employees are not productive resources, it makes no sense to keep them.

Would you expect a CEO to pay rent on a vacant building that no longer has any use?

Keeping unnecessary employees is no different.

Of course the calculations don’t need to be entirely callous. There are compassionate ways to handle these situations, although many CEOs suck at compassion.

Nevertheless the decision to keep or not keep an employee is a business decision, not a charitable one.

And it works both ways. Few people go to work every day to be charitable. They do it for the money.

[Hobie]

Whoa. Markets change. What was valuable before can be eclipsed with advancing technology. Pentium III was the bomb, for a while..

[FlyerInHi]

[quote=harvey]

And it works both ways. Few people go to work every day to be charitable. They do it for the money.[/quote]

But like any relationship there are power dynamics. The side with relatively more power will have the upper hand and will make the rules.

One example: at will employees can be fired anytime; and the employees can “fire” the employer and leave anytime. But the truth is that employers will fire employees the same day. But the employee is usually expected to give 2-week notice. There is a clear power imbalance.

[joec]

This is why I am fascinated by companies who never lay people off. They find ways to reallocate and retrain those “resources” to new tasks. Like you find a way to reuse your old phone for your kid to play android games, etc…instead of tossing it out. This is sometimes done at the executive suite to train up and coming C-level folks to do global tasks, but would be nicer if thought about more throughout more companies.

There’s this constant complaint in the tech industry (and I’ve worked in it in the past) that there isn’t enough tech folks.

The reality is that with the way how tech works, unless you learn the current/latest stuff, you’re old news and useless to the company. There is VERY LITTLE desire at a lot of companies to get workers exposed to different technologies, current stuff, give them time to learn new things, etc…Just do your basic task and don’t bother me.

Some companies are better about this, but I suppose ultimately, it’s more profitable to just fire and hire.

[bobby]

[quote=FlyerInHi][quote=harvey]

And it works both ways. Few people go to work every day to be charitable. They do it for the money.[/quote]

But like any relationship there are power dynamics. The side with relatively more power will have the upper hand and will make the rules.

One example: at will employees can be fired anytime; and the employees can “fire” the employer and leave anytime. But the truth is that employers will fire employees the same day. But the employee is usually expected to give 2-week notice. There is a clear power imbalance.[/quote]
you can up and leave.
“I quit”. of course that bridge is burned.
if one work in a small industry, burning too many bridges is bad for career unless that person is a known superstar.
in a big industry, not so much.

[spdrun]

But the employee is usually expected to give 2-week notice. There is a clear power imbalance.

Expected to doesn’t mean you have to. Not illegal to simply not show up one fine morning and let them chase their tails till they realize you’re gone.

This should be used judiciously, only in a way that inflicts maximal damage to a firm that treats its employees like crap anyway.

[FlyerInHi]

Expectations affect consumer behavior. So it’s a two-way street in name only.

As a whole, people think like caring, decent human beings.

Generally, businessed only care about profits and the law.

During the housing crisis, why was there so much pushback against strategic default? Businesses do it all the time. Developers setup corporations to personally insulate their wealth. When a project goes south, they walk.

In contrast, a person who defaults is looked down upon, when in fact all he did was follow the letter of the contract. Another example: with consumer credit, people could just walk after maxing out their credit lines. It’s unsecured, so it’s up to the creditors to pursue. Good luck to them.

My point is that if people behave like businesses, without regard to morals, in a legalistic, profit maximizing manner, then the world will be a whole lot different.

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