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I partly remember seeing this company outsource all the work to my former company. Digging a little deeper you can see that the company in its final years laid

I partly remember seeing this company outsource all the work to my former company. Digging a little deeper you can see that the company in its final years laid off all the workers and outsourced most of its operations. It looks like a pattern now. If you see a company outsourcing everything and laying off its own workers it means that the company is not going to survive for long. Whenever the management feels that workers are a problem and not the way it operates its business that company will soon die in the next few years.

nine_k 8y ago
I suppose it's a way to extract most value for lenders and shareholders. If a bankrupt company has little staff and no departments besides administrative, there are little liabilities, and little post-dissolution hassle. All remaining assets are reasonably liquid.
- ironic_ali 8y ago
  I wonder what their pension liabilities are for current and previous staff? And whether those funds are classed as company assets or seperate fro the bankruptcy?
- pjc50 8y ago
  If you look closely, quite a lot of the money often goes to senior management. Or it's extracted by a hedge fund in a takeover.
austincheney 8y ago
Workers are a cost factor. From an accounting perspective the belief is that eliminating that cost would put more numbers on the other side of the balance sheet. The financial and economic reality is that those people either performed a necessary task the business needs or they didn't and if they were needed it will cost more to eliminate them. These kinds of strategic failures are likely present in more than just labor.
freddie_mercury 8y ago
You think PG&Es problem was outsourcing and not Californian law making them liable for wildfire damages even in the absence of negligence? That's....a novel take.
- slashink 8y ago
  Interested to hear your full angle on this, not trying to flame bait here but genuinely curious.
  - colechristensen 8y ago
    My impression based on limited information is that many of the areas were so overloaded with dry dead vegetation that who sparked the otherwise inevitable fire should be irrelevant. The state forcing liability like it is amounts to nothing but a back-door tax propping up areas which should be uninhabited because of the risk.
  - y4mi 8y ago
    You might want to read the article, its well written and addresses that point.
  - garmaine 8y ago
    Some of the recent fires were thought to be caused by PGE negligence. Once brought under control and investigated, it turned out to be your very standard sparks-on-the-road and dry bush fire, just grown to epic proportions. Nevertheless some maintenance issues were found in PGE’s service record and they are still being held accountable by the state, for a fire they didn’t cause. Right criminal, wrong crime. I’m not a fan of PGE, and I’m personally very happy their filing for bankruptcy, but there does appear to be some political grandstanding and scapegoating here.
  - onetimemanytime 8y ago
    >>State regulators point out that overall, only about 10 percent or less of the state’s wildfires are triggered by power line issues. But they acknowledge the state’s 176,000-mile system of overhead electrified lines has played a role in igniting some of the biggest and most destructive fires in recent years. https://www.sacbee.com/news/business/article221707650.html https://www.sacbee.com/news/business/article221707650.html So fires will happen. But also with 176,000 MILES of wires through all kinds of terrain, there's a limit on how much they can do. Summertime those forests almost don't even need a spark to light up, it's so dry and full of combustible material. And then, a tree from 45 yards away falls on the wires...
wheelerwj 8y ago
a very large number of businesses outsource almost their entire functionality. Uber, Lyft, Robinhood, Comcast, Fedex/UPS, Netflix (i cant remember which one uses ICs for all of their trucks). aggregators/marketplaces/exchanges are just one of the many business models companies pursue.
_pmf_ 8y ago
> If you see a company outsourcing everything and laying off its own workers it means that the company is not going to survive for long. Whenever the management feels that workers are a problem and not the way it operates its business that company will soon die in the next few years. The same managers will run a very similar company with the same customers in less than 3 months.
onetimemanytime 8y ago
With all those forests ready to scorch thanks to mismanagement and global warming it was just a matter time. Nothing to do with contractors or layoffs. Maybe, they might have gotten lucky this fire, but not the next and the next and the next.
Kurtz79 8y ago
Not saying you are wrong, but a single instance (or two) of an occurrance does not make a pattern.
- throwaway2048 8y ago
  Its an extremely common pattern, in tech companies it tends to manifest with laying off all the R&D staff, posting a few quarters of amazing returns, and the executives jumping ship to do it again before the whole house collapses.

nine_k 8y ago

I suppose it's a way to extract most value for lenders and shareholders. If a bankrupt company has little staff and no departments besides administrative, there are little liabilities, and little post-dissolution hassle. All remaining assets are reasonably liquid.

ironic_ali 8y ago
I wonder what their pension liabilities are for current and previous staff? And whether those funds are classed as company assets or seperate fro the bankruptcy?
pjc50 8y ago
If you look closely, quite a lot of the money often goes to senior management. Or it's extracted by a hedge fund in a takeover.

austincheney 8y ago

Workers are a cost factor. From an accounting perspective the belief is that eliminating that cost would put more numbers on the other side of the balance sheet. The financial and economic reality is that those people either performed a necessary task the business needs or they didn't and if they were needed it will cost more to eliminate them. These kinds of strategic failures are likely present in more than just labor.

freddie_mercury 8y ago

You think PG&Es problem was outsourcing and not Californian law making them liable for wildfire damages even in the absence of negligence? That's....a novel take.

slashink 8y ago
Interested to hear your full angle on this, not trying to flame bait here but genuinely curious.
- colechristensen 8y ago
  My impression based on limited information is that many of the areas were so overloaded with dry dead vegetation that who sparked the otherwise inevitable fire should be irrelevant. The state forcing liability like it is amounts to nothing but a back-door tax propping up areas which should be uninhabited because of the risk.
- y4mi 8y ago
  You might want to read the article, its well written and addresses that point.
- garmaine 8y ago
  Some of the recent fires were thought to be caused by PGE negligence. Once brought under control and investigated, it turned out to be your very standard sparks-on-the-road and dry bush fire, just grown to epic proportions. Nevertheless some maintenance issues were found in PGE’s service record and they are still being held accountable by the state, for a fire they didn’t cause. Right criminal, wrong crime. I’m not a fan of PGE, and I’m personally very happy their filing for bankruptcy, but there does appear to be some political grandstanding and scapegoating here.
- onetimemanytime 8y ago
  >>State regulators point out that overall, only about 10 percent or less of the state’s wildfires are triggered by power line issues. But they acknowledge the state’s 176,000-mile system of overhead electrified lines has played a role in igniting some of the biggest and most destructive fires in recent years. https://www.sacbee.com/news/business/article221707650.html https://www.sacbee.com/news/business/article221707650.html So fires will happen. But also with 176,000 MILES of wires through all kinds of terrain, there's a limit on how much they can do. Summertime those forests almost don't even need a spark to light up, it's so dry and full of combustible material. And then, a tree from 45 yards away falls on the wires...

wheelerwj 8y ago

a very large number of businesses outsource almost their entire functionality. Uber, Lyft, Robinhood, Comcast, Fedex/UPS, Netflix (i cant remember which one uses ICs for all of their trucks). aggregators/marketplaces/exchanges are just one of the many business models companies pursue.

_pmf_ 8y ago

> If you see a company outsourcing everything and laying off its own workers it means that the company is not going to survive for long. Whenever the management feels that workers are a problem and not the way it operates its business that company will soon die in the next few years. The same managers will run a very similar company with the same customers in less than 3 months.

onetimemanytime 8y ago

With all those forests ready to scorch thanks to mismanagement and global warming it was just a matter time. Nothing to do with contractors or layoffs. Maybe, they might have gotten lucky this fire, but not the next and the next and the next.

Kurtz79 8y ago

Not saying you are wrong, but a single instance (or two) of an occurrance does not make a pattern.

throwaway2048 8y ago
Its an extremely common pattern, in tech companies it tends to manifest with laying off all the R&D staff, posting a few quarters of amazing returns, and the executives jumping ship to do it again before the whole house collapses.