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They had a huge surge of demand coming out of COVID, and hired to meet that demand. That demand is gone, and they are moving their staff requirements back down

They had a huge surge of demand coming out of COVID, and hired to meet that demand. That demand is gone, and they are moving their staff requirements back down closer to pre-COVID (and not even that far). What exactly were they suppose to do?

mschuster91 3y ago
Keep the headcount as high as possible while still turning a profit so they can react on demand going up again in a short notice.
- gruez 3y ago
  >Keep the headcount as high as possible while still turning a profit Opportunity cost is a thing. Just because you're not in the red doesn't mean the decision is costless. Think about it from the opposite perspective. Suppose you're a company with the right number of employees (neither too much nor too little) but you see demand is dropping. Would you go on a hiring spree so you could "react on demand going up again in a short notice"?
  - ethbr1 3y ago
    Specifically, people forget that there always options to deploy limited capital. - Spend it on labor - Spend it on sales - Spend it on R&D - Fund capital improvements - Save it in bonds Which is better for Maersk in a softening demand environment? To retain headcount or invest in capital improvements on their ships/facilities? Their CFO office has definitely modeled relative ROI. And, from a more socially conscious perspective, let's not forget the shipping industry is trying to budget massive capital expenditures to reduce their carbon footprint by reworking their ship powerplants.
- matwood 3y ago
  Anything done to keep headcount above necessary levels would have caused slower hiring and in turn caused the demand shock to go on even longer. I'm curious about your solution though. How many people do they need to keep on staff that are not doing anything? How much profit are they allowed? Do they have to lose money before they are allowed to trim the workforce? Do they need to be prepared for another COVID-level demand surge?
  - mschuster91 3y ago
    > How many people do they need to keep on staff that are not doing anything? They could also reduce the amount of hours that everyone works. It's high time for another reduction in hours-per-week anyway. > Do they have to lose money before they are allowed to trim the workforce? In a society that values its citizens over its corporations, yes. > Do they need to be prepared for another COVID-level demand surge? It's not unlikely that there will be a surge once the Russians get booted out of Ukraine.
- AmVess 3y ago
  These are capitalist ventures, not socialist ventures. The goal is to make money, not become a warehouse for dead weight.

mschuster91 3y ago

Keep the headcount as high as possible while still turning a profit so they can react on demand going up again in a short notice.

gruez 3y ago
>Keep the headcount as high as possible while still turning a profit Opportunity cost is a thing. Just because you're not in the red doesn't mean the decision is costless. Think about it from the opposite perspective. Suppose you're a company with the right number of employees (neither too much nor too little) but you see demand is dropping. Would you go on a hiring spree so you could "react on demand going up again in a short notice"?
- ethbr1 3y ago
  Specifically, people forget that there always options to deploy limited capital. - Spend it on labor - Spend it on sales - Spend it on R&D - Fund capital improvements - Save it in bonds Which is better for Maersk in a softening demand environment? To retain headcount or invest in capital improvements on their ships/facilities? Their CFO office has definitely modeled relative ROI. And, from a more socially conscious perspective, let's not forget the shipping industry is trying to budget massive capital expenditures to reduce their carbon footprint by reworking their ship powerplants.
matwood 3y ago
Anything done to keep headcount above necessary levels would have caused slower hiring and in turn caused the demand shock to go on even longer. I'm curious about your solution though. How many people do they need to keep on staff that are not doing anything? How much profit are they allowed? Do they have to lose money before they are allowed to trim the workforce? Do they need to be prepared for another COVID-level demand surge?
- mschuster91 3y ago
  > How many people do they need to keep on staff that are not doing anything? They could also reduce the amount of hours that everyone works. It's high time for another reduction in hours-per-week anyway. > Do they have to lose money before they are allowed to trim the workforce? In a society that values its citizens over its corporations, yes. > Do they need to be prepared for another COVID-level demand surge? It's not unlikely that there will be a surge once the Russians get booted out of Ukraine.
AmVess 3y ago
These are capitalist ventures, not socialist ventures. The goal is to make money, not become a warehouse for dead weight.