The sun has now set on one of the most storied American corporations. For the 15 year period from 1982 to 1997, it was THE top performer in the entire US stock market. Jim Collins immortalized the company in his 2001 bestseller Good to Great. Today, Circuit City has gone out of business and laid off 34,000 employees.
Back in October, consulting firm Watson Wyatt reported on CNN Money that a quarter of US employers expect to make layoffs over the next twelve months. That estimate may be conservative now with some analysts predicting unemployment at 10 percent or higher over this next year. Corporate layoffs have become the daily news headlines.
Circuit City's layoffs were out of necessity because the work is clearly gone. But are some corporations simply cleaning house during this economic downturn? There are altruistic executives out there, but the cold reality is that publically traded companies are accountable to shareholders. Are some companies simply reacting to market pressure to cut costs? Or is the work clearly gone and layoffs are an absolute necessity?
Do you feel the US Government's stimulus plan will create a sufficient number of new jobs in the short term?
Tuesday, February 3, 2009
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The following response was posted to my same question in LinkedIn:
ReplyDeleteMost of us benefited from the economic uproar across the globe which resulted in eliminating unemployment to a greater extent. Considering Indian IT industry, most co's were overstaffed. These lay-off's are justified to some extent. Top brass exec's of many co's have waken-up to the fact that lavish times are now about to end. This should be considered as learning for many HR leaders.
All of us are a part of a value chain and any disturbance is bound to send ripples across all domains. The economic slowdown/meltdown has acted as a catalyst to worsen things. Organizations are certainly making sound decisions of cutting costs piling up due to overstaffing. "You need to fight it out to survive".....the world has always been like that. Seems like we had taken things for granted for a long time. I've tried not to hurt the sentiments of anybody.
The following response was posted to my same question in LinkedIn:
ReplyDeleteI'm sure in some cases the "work is gone" and "layoffs are absolutely necessity". However, some (probably more than half) are laying off 5000 when only 1000 is necessary, or laying off 500 when 0 are necessary to reduce costs associated with labor and drive up shareholder price and confidence.
I won't begin to address the consipiracy theory of laying off, to force a temporary drop in stock price, for certain groups to buy stock at a "reduced" rate, only to report higher than expected quarterly/annual prices that drive up stock prices and the same groups get even wealthier.
The following response was posted to my same question in LinkedIn:
ReplyDeleteLayoffs are absolutley necessity in some cases. But a lot of layoffs that are happing today are the results of management trying to reduce the cost of labor. Unfortanatly managment rarely starts with them selves and works down. They start at the bottom and when enough of labor costs are gone they dont have to worry about themselves.
Also layoffs have become all about money and nothing about the staff that it effects. Employees used to be safe if you did everything you were asked and more, now that will not even save you. If you are getting paid more than your coworkers you are now a target for a lay off.