8 ms·

In Tough Times, Abandon Your Employees

49 points by rdudekul 13y ago

creature 13y ago
> If this is an intelligent and proper strategy, why shouldn't companies formally declare that they follow it? Because it's a way more effective strategy if you practice the cut-throat approach while portraying a fuzzy, caring public image. To some extent, you can have your cake and eat it too.
rdudekul 13y ago
OP is the author of "Smart Customers, Stupid Companies: Why Only Intelligent Firms Will Thrive, and How to Be One of Them" has some good free ebooks to download at http://kasanoff.com/free-stuff/ http://kasanoff.com/free-stuff/
scottostler 13y ago
The reason companies don't loudly proclaim this kind of thing seems pretty simple to me. Companies must simultaneously communicate with many different parties: employees, customers, investors, the board, governments, etc. An effective message for one constituency is often horribly inappropriate for another – layoffs are a great example of this. So when companies do decide that cutting costs is more important than keeping employees, they message that in one way to employees, and in another way to analysts and investors. Employees and the general public who sympathizes with them might call that duplicitous and slimy, but it's a response to the balancing act the companies have to perform.
temphn 13y ago
This article fundamentally misunderstands what profits mean in a financial statement. "Record profits" are recorded because companies are afraid to expand. They expect a macroeconomic contraction. Remember: profits aren't included in the salary number, as that's a cost. So "record profits" aren't going to executives - that would be salary or options. And they usually aren't distributed as dividends. They go into the corporate bank account, namely the rainy day fund of the company. And the reason they are going into the rainy day fund of the company is that businesses in general expect many costs to come over the next few years, from the QE tapering to Obamacare. Otherwise businesses would spend those "record profits" on hiring and expansion, or on salary increases to retain top talent, or on acquisitions. I think the fundamental misunderstanding here is that "record profits" have anything to do with executive salaries. Salaries are a cost. Visual analogy: this is like reducing your marginal headcount and husbanding your corn with the expectation of a massive storm on the horizon. It does NOT mean you are feasting on your corn after kicking out marginal producers.
- michaelochurch 13y ago
  I think the fundamental misunderstanding here is that "record profits" have anything to do with executive salaries. Salaries are a cost. There's an association and correlation, though. It's easier for executives to ramp up their compensation if the company is profitable. So if an executive can do something short-sighted that improves profits in the short term, or even something degenerately risky that may turn a huge profit. Principal and agent usually break (that is, their interests diverge) at the second moment (risk/variance). Everyone wants profit/expectancy (first moment). There's no tension there; who doesn't want to make money? Risk is a nother matter. Principal usually wants as little risk per unit upside as possible; agent typically wants more risk because upside leads to higher compensation but the difference between a small down year and a big one is minimal. For example, a hedge fund manager collects 2% of assets managed and 20% of profits. (If profits are below zero, redemptions happen and that often kills the fund.) So a return of -30 and -10 have the same effect-- shit year, no bonus, everyone gets fired-- but the difference between +10 and +30 is huge. That's why a lot of these firms take degenerate bets. Someone else eats most of their losses, but they get a lot if they win. Executives work the same way. They push for huge initiatives that add risk to the business. Big wins makes them rich, little wins make them comfortable; the difference between little losses and big losses, for them, is zero. They have no reason not to take big risks with the company. Large-scale cost-cutting is especially good from an executive perspective because the benefits are immediate but the problems it causes tend to show up in the long term, giving the executive time to flee if the results are bad.
  - sseveran 13y ago
    Your analogy to hedge funds is utterly inaccurate for most large funds. Smaller funds tend to take more bets but most large funds and fund groups attempt not to take on too much risk. If you got to a conference for large asset managers you will hear almost nothing about how to make returns, instead on how to gather and retain assets. 2% on $2B (smaller end of medium size) is $40M per year.
- 7Figures2Commas 13y ago
  > "Record profits" are recorded because companies are afraid to expand. They expect a macroeconomic contraction. That isn't necessarily true. A company's expansion does not always require the expansion of its work force and increased profit can reflect many things: higher productivity, lower cost of goods sold, increased revenue from higher margin lines of business, accounting and tax events, etc. This said, it is important to recognize that while profit describes where a company has been, head count is in many respects a forward-looking figure based on future expectations. Who you hire and fire today often has a lot less to do with what's happening now than what a company expects will happen tomorrow, good or bad.
7Figures2Commas 13y ago
> But it strikes me as horribly short-sighted for a company to simultaneously report record profits and fire loyal employees. This is an incredibly naive conclusion, one that I would argue could only be reached without any critical analysis whatsoever. For one, record profits can be ephemeral. Many companies thrive and dive based on the business cycle. As we saw in 2008, the dynamics of a company can change relatively quickly, so record profits today don't guarantee record profits, or even a profit at all, tomorrow. Building a strong cash position and/or returning capital to investors in one form or another often prove crucial to a company's long-term ability to survive and grow. More importantly, it's critical to recognize that a loyal employee isn't necessarily a good employee, or a necessary employee. At large companies, particularly outside of technology, you can often find plenty of "loyal" employees: workers who have been on the job for more than a decade who would love nothing more than to stay in that job for decades to come. Some percentage of these employees, however, are better at doing what it takes to secure their jobs than they are contributing to the ongoing success of the company. Others, while dedicated and hard-working, may simply lack the skills required to contribute as the company evolves. Companies are not static; as they grow and market conditions change, it may be necessary to hire in some areas, and fire in others. The author of this post might as well have used the title, "In tough times, abandon tough decisions."
- nickff 13y ago
  I would also like to add that it is in the interest of the valuable employees to lay off the low value employees for three reasons: 1) Low value employees reduce net cash flow (profits), which can cause the company to go under when times get tough. This would cause difficulty to all employees, not just the marginal ones. 2) All employees add organizational inertia; in the case of low value employees, this is needless and prevents adaptation to changing market conditions, which can doom any organization. 3) Every non-value creating employee is consuming a salary which could be used to hire someone who might create value, growth, and possibly additional hiring.
Millennium 13y ago
Companies and employees don't "owe" each other loyalty, but the only way to earn loyalty from someone is to show it in return. If a company decides to throw its employees under the bus during tough times, that is its prerogative, but then it should not turn around and expect employees to stick by it during tough times either.
- coldtea 13y ago
  >but then it should not turn around and expect employees to stick by it during tough times either. Only they (companies) do expect it, and even get it. Because the employees are dependent on them, and not vice versa. Those that say: just quit and get another job (mostly white, upper-middle class), have never been in the situation of having to keep a job to feed a family and/or mortage while not being someone coveted by recruiters.
  - peacemaker 13y ago
    But that just speaks of a bigger problem, that of people who have children and buy houses they can't afford. Most people, minority or otherwise, can find a job if they had none of these ties they can't afford. I realize that's a simplistic view but I think that's what it boils down to. If people spent even just a few moments thinking about their own future and prospects they might decide against purchasing a home, having kids, getting a new car and so on.
    - salemh 13y ago
      Determinate on said employee's skills being mobile across industries and companies, which may not be the norm outside of IT/software currently. "Why don't they just leave?" is not a valid argument.
      - nickff 13y ago
        One should be aware of the risks of developing a dependence on a job which may become redundant, because of corporate layoffs or technological progress. One example of this is that if you were a biochemist who got a PhD in genome sequencing, machines put you out of a job. A consequence of reducing your long term career risk may be that you will have lower income (at least in the short term). You may believe that individuals have the right to maximize their short term income; but does this desire impose a responsibility on their employer not to fire the profit maximizing individual?
michaelochurch 13y ago
My biggest issue with corporate layoffs is that not that they happen-- they're inevitable and necessary-- but that they're often done in an incompetent way that fails to account for the real problems. Everything that grows will eventually experience contraction; the problem is that companies don't know how to contract in a decent way. If you do a layoff wrong, the company ends up more fucked-up and future layoffs are inevitable. 1. Reducing headcount without reducing complexity will fail. Reducing operational complexity is hard because it requires that the top executives get access to information that the mere process of looking for will tip people off, and because it gets political rapidly. Layoffs need to happen quickly, the theory goes, so it's easier and better to just cut away 10% of the people in one fell swoop and, later on, reduce complexity. However, the complexity reduction often never occurs. According to typical executive thinking, it can't happen before the layoff-- it'd tip people that something's going on-- but after the layoff, people tend to see the first-order immediate problem (high costs) as solved and therefore don't handle the deeper issue (high complexity) that got the company in trouble in the first place. Thus, fewer people have to do more work; they do a worse job of it, and the higher defect rate leads to even more complexity, and everything goes to hell. 2. Plenty of companies are dishonest about layoffs and dress them up as aggressive "performance" reviews. I won't list names, but there are plenty of dishonest technology companies that claim to have never had a layoff because what the psychopaths in charge actually did was dress one up as performance-based firings, with kangaroo courts ("performance improvement plans") and all. At least banks are honest; they say, "business was shitty this year and we let people go". But there are so many tech companies that don't want the press of an honest layoff (they even pretend to be constantly hiring, to present an image of unyielding growth) so they lie and call it "performance". An existing stack-ranking regime helps. What these companies are really doing is throwing their own people under the bus to preserve their own reputations, and they shouldn't be surprised when people fuck them right back for it.
- xradionut 13y ago
  Stop bagging on Microsoft! ;)
jbooth 13y ago
The thing I really don't understand is the persistent meme that companies have some obligation to their shareholders above and beyond their obligation to their employees, common ethics or the spirit of the law. It's practically an article of faith in the business community that you deserve an 'attaboy' for laying a bunch of people off if it increases profit. But stiff the shareholders? Oh, the humanity! We're developing morals all of a sudden! If all's fair in business, why don't we treat the shareholders as suckers, too? If enough of them get together, they can vote to fire you, but short of that, why do they deserve additional respect?
- csbrooks 13y ago
  Coincidentally, the executives making the decisions are shareholders, too.
  - AsymetricCom 13y ago
    This seems to me that you're saying that they shouldn't be responsible for their failure. This leads to the discussion of whether or not people who start or back failed/failing businesses have made a net contribution to society or are simply leaching off the contributions/momentum of others. Obviously, there is a balance to these things. You're both contributing and leeching with a failed business. Monopolies are the same as well. Each one can be abused or used to create a contribution or to coopt value. What really matters is when you're all said in done, is everyone, including the employees, better off?
  - wmeredith 13y ago
    Ding, ding, ding. The people calling the shots are more invested in the share price than in some public perception of the company, that is until the bad PR affects the share price.
- rayiner 13y ago
  Business ethics is dead in America. It has been replaced by faith in the market, the belief that market outcomes are intrinsically moral.
venomsnake 13y ago
Mass unemployment is one of the greatest plagues of a modern country. This is just one of the (many) sad side effects. Too bad the lesson was forgotten globally by the ruling class.
- consonants 13y ago
  Mass unemployment ensures that there is always someone who will trade their labor for the lowest possible price so that they don't starve. It's built into the system, less of a plague and more of necessary requisite for capitalism.
  - venomsnake 13y ago
    Nope. Inflation and unemployment are built in. Hyperinflation and big unemployment are tumors. They should be kept in a goldilocks range preferably around 3-4%. If you have labor shortage the economy cannot grow as fast as possible. If you have big surplus - then you have big demand slump that moves you to a deflation spiral.
    - consonants 13y ago
      Thanks for the correction.
dominic_cocch 13y ago
There must be some kind of study about businesses that are loyal to employees and loud about that loyalty. How does that affect their bottom line? Do customers/clients choose to do business with an ethical company over an unethical one? If not, maybe the bigger problem is that the employees of the world choose to do business with companies that are not good to employees. If ethical behavior was an important factor in customer's choices I'm sure we'd see less unethical behavior by businesses. However, Walmart, Goldman Sachs, McDonalds, etc all continue to thrive after their unethical behavior is made very public.
- xradionut 13y ago
  In the case of many consumers and Walmart, the consumer doesn't have the money to pay for the alternative. It's the only affordable market in their area. In the case of Goldman Sachs, consumers are not involved, the company has so much power, no one in government dares to strongly enforce the laws, short of a slap on the wrist. In a utopian "ethical" world, GS would have been dead in the 1930s...
300bps 13y ago
This ignores the fact that many downturn layoffs are merely excuses to rid a company of dead weight. It's expensive and risky to let someone go for cause. It's cheap and virtually risk free to do a mass layoff due to a decline in business.
socrates1998 13y ago
Yeah, it sucks to be fired. But, if you were worth more to your company than you are being paid, then they wouldn't have fired you. This is tough to hear, but it is the truth. Some might say that the company was wrong, and that may be true, but if the company is wrong about who it fires and hires, it will no longer be a company. Your company is extracting value from you, that is how they make money. If you are not looking for a way out or up, then you are going to lose. Managing your career is something people just don't think about enough. They like to think, "If I am loyal and work hard, then I will always have a job." That's bullshit. I have known lots of people who worked hard and were loyal, but still got axed because they didn't create enough value. This article has a "it's not fair" quality to it. Well, no shit it's not fair. Because we spend so much time at work, we project loyalty and security onto our company. We are fooled into thinking they are loyal to us.
- JoeAltmaier 13y ago
  Not the whole storey. E.g. I plant 4 tomato plants. When they are half-grown, I pull up 2. Not because they each aren't worth more than the cost to me; but because I have water, soil, light, room enough for only 2. So Its also naïve to think you're fired because you're not a profitable employee. Sometimes you get fired because it makes a large equation work out better.
fnordfnordfnord 13y ago
In tough times, in good times, anytime it becomes advantageous to do so. Isn't that what the "Lean" discipline boils down to?
beefxq 13y ago
The future is contracting/consulting. There will be no more full time employees.

49 points by rdudekul 13y ago

> If this is an intelligent and proper strategy, why shouldn't companies formally declare that they follow it? Because it's a way more effective strategy if you practice the cut-throat approach while portraying a fuzzy, caring public image. To some extent, you can have your cake and eat it too.

rdudekul 13y ago

OP is the author of "Smart Customers, Stupid Companies: Why Only Intelligent Firms Will Thrive, and How to Be One of Them" has some good free ebooks to download at http://kasanoff.com/free-stuff/ http://kasanoff.com/free-stuff/

scottostler 13y ago

The reason companies don't loudly proclaim this kind of thing seems pretty simple to me. Companies must simultaneously communicate with many different parties: employees, customers, investors, the board, governments, etc. An effective message for one constituency is often horribly inappropriate for another – layoffs are a great example of this. So when companies do decide that cutting costs is more important than keeping employees, they message that in one way to employees, and in another way to analysts and investors. Employees and the general public who sympathizes with them might call that duplicitous and slimy, but it's a response to the balancing act the companies have to perform.

temphn 13y ago

This article fundamentally misunderstands what profits mean in a financial statement. "Record profits" are recorded because companies are afraid to expand. They expect a macroeconomic contraction. Remember: profits aren't included in the salary number, as that's a cost. So "record profits" aren't going to executives - that would be salary or options. And they usually aren't distributed as dividends. They go into the corporate bank account, namely the rainy day fund of the company. And the reason they are going into the rainy day fund of the company is that businesses in general expect many costs to come over the next few years, from the QE tapering to Obamacare. Otherwise businesses would spend those "record profits" on hiring and expansion, or on salary increases to retain top talent, or on acquisitions. I think the fundamental misunderstanding here is that "record profits" have anything to do with executive salaries. Salaries are a cost. Visual analogy: this is like reducing your marginal headcount and husbanding your corn with the expectation of a massive storm on the horizon. It does NOT mean you are feasting on your corn after kicking out marginal producers.

michaelochurch 13y ago
I think the fundamental misunderstanding here is that "record profits" have anything to do with executive salaries. Salaries are a cost. There's an association and correlation, though. It's easier for executives to ramp up their compensation if the company is profitable. So if an executive can do something short-sighted that improves profits in the short term, or even something degenerately risky that may turn a huge profit. Principal and agent usually break (that is, their interests diverge) at the second moment (risk/variance). Everyone wants profit/expectancy (first moment). There's no tension there; who doesn't want to make money? Risk is a nother matter. Principal usually wants as little risk per unit upside as possible; agent typically wants more risk because upside leads to higher compensation but the difference between a small down year and a big one is minimal. For example, a hedge fund manager collects 2% of assets managed and 20% of profits. (If profits are below zero, redemptions happen and that often kills the fund.) So a return of -30 and -10 have the same effect-- shit year, no bonus, everyone gets fired-- but the difference between +10 and +30 is huge. That's why a lot of these firms take degenerate bets. Someone else eats most of their losses, but they get a lot if they win. Executives work the same way. They push for huge initiatives that add risk to the business. Big wins makes them rich, little wins make them comfortable; the difference between little losses and big losses, for them, is zero. They have no reason not to take big risks with the company. Large-scale cost-cutting is especially good from an executive perspective because the benefits are immediate but the problems it causes tend to show up in the long term, giving the executive time to flee if the results are bad.
- sseveran 13y ago
  Your analogy to hedge funds is utterly inaccurate for most large funds. Smaller funds tend to take more bets but most large funds and fund groups attempt not to take on too much risk. If you got to a conference for large asset managers you will hear almost nothing about how to make returns, instead on how to gather and retain assets. 2% on $2B (smaller end of medium size) is $40M per year.
7Figures2Commas 13y ago
> "Record profits" are recorded because companies are afraid to expand. They expect a macroeconomic contraction. That isn't necessarily true. A company's expansion does not always require the expansion of its work force and increased profit can reflect many things: higher productivity, lower cost of goods sold, increased revenue from higher margin lines of business, accounting and tax events, etc. This said, it is important to recognize that while profit describes where a company has been, head count is in many respects a forward-looking figure based on future expectations. Who you hire and fire today often has a lot less to do with what's happening now than what a company expects will happen tomorrow, good or bad.

7Figures2Commas 13y ago

> But it strikes me as horribly short-sighted for a company to simultaneously report record profits and fire loyal employees. This is an incredibly naive conclusion, one that I would argue could only be reached without any critical analysis whatsoever. For one, record profits can be ephemeral. Many companies thrive and dive based on the business cycle. As we saw in 2008, the dynamics of a company can change relatively quickly, so record profits today don't guarantee record profits, or even a profit at all, tomorrow. Building a strong cash position and/or returning capital to investors in one form or another often prove crucial to a company's long-term ability to survive and grow. More importantly, it's critical to recognize that a loyal employee isn't necessarily a good employee, or a necessary employee. At large companies, particularly outside of technology, you can often find plenty of "loyal" employees: workers who have been on the job for more than a decade who would love nothing more than to stay in that job for decades to come. Some percentage of these employees, however, are better at doing what it takes to secure their jobs than they are contributing to the ongoing success of the company. Others, while dedicated and hard-working, may simply lack the skills required to contribute as the company evolves. Companies are not static; as they grow and market conditions change, it may be necessary to hire in some areas, and fire in others. The author of this post might as well have used the title, "In tough times, abandon tough decisions."

nickff 13y ago
I would also like to add that it is in the interest of the valuable employees to lay off the low value employees for three reasons: 1) Low value employees reduce net cash flow (profits), which can cause the company to go under when times get tough. This would cause difficulty to all employees, not just the marginal ones. 2) All employees add organizational inertia; in the case of low value employees, this is needless and prevents adaptation to changing market conditions, which can doom any organization. 3) Every non-value creating employee is consuming a salary which could be used to hire someone who might create value, growth, and possibly additional hiring.

Millennium 13y ago

Companies and employees don't "owe" each other loyalty, but the only way to earn loyalty from someone is to show it in return. If a company decides to throw its employees under the bus during tough times, that is its prerogative, but then it should not turn around and expect employees to stick by it during tough times either.

coldtea 13y ago
>but then it should not turn around and expect employees to stick by it during tough times either. Only they (companies) do expect it, and even get it. Because the employees are dependent on them, and not vice versa. Those that say: just quit and get another job (mostly white, upper-middle class), have never been in the situation of having to keep a job to feed a family and/or mortage while not being someone coveted by recruiters.
- peacemaker 13y ago
  But that just speaks of a bigger problem, that of people who have children and buy houses they can't afford. Most people, minority or otherwise, can find a job if they had none of these ties they can't afford. I realize that's a simplistic view but I think that's what it boils down to. If people spent even just a few moments thinking about their own future and prospects they might decide against purchasing a home, having kids, getting a new car and so on.
  - salemh 13y ago
    Determinate on said employee's skills being mobile across industries and companies, which may not be the norm outside of IT/software currently. "Why don't they just leave?" is not a valid argument.
    - nickff 13y ago
      One should be aware of the risks of developing a dependence on a job which may become redundant, because of corporate layoffs or technological progress. One example of this is that if you were a biochemist who got a PhD in genome sequencing, machines put you out of a job. A consequence of reducing your long term career risk may be that you will have lower income (at least in the short term). You may believe that individuals have the right to maximize their short term income; but does this desire impose a responsibility on their employer not to fire the profit maximizing individual?

michaelochurch 13y ago

My biggest issue with corporate layoffs is that not that they happen-- they're inevitable and necessary-- but that they're often done in an incompetent way that fails to account for the real problems. Everything that grows will eventually experience contraction; the problem is that companies don't know how to contract in a decent way. If you do a layoff wrong, the company ends up more fucked-up and future layoffs are inevitable. 1. Reducing headcount without reducing complexity will fail. Reducing operational complexity is hard because it requires that the top executives get access to information that the mere process of looking for will tip people off, and because it gets political rapidly. Layoffs need to happen quickly, the theory goes, so it's easier and better to just cut away 10% of the people in one fell swoop and, later on, reduce complexity. However, the complexity reduction often never occurs. According to typical executive thinking, it can't happen before the layoff-- it'd tip people that something's going on-- but after the layoff, people tend to see the first-order immediate problem (high costs) as solved and therefore don't handle the deeper issue (high complexity) that got the company in trouble in the first place. Thus, fewer people have to do more work; they do a worse job of it, and the higher defect rate leads to even more complexity, and everything goes to hell. 2. Plenty of companies are dishonest about layoffs and dress them up as aggressive "performance" reviews. I won't list names, but there are plenty of dishonest technology companies that claim to have never had a layoff because what the psychopaths in charge actually did was dress one up as performance-based firings, with kangaroo courts ("performance improvement plans") and all. At least banks are honest; they say, "business was shitty this year and we let people go". But there are so many tech companies that don't want the press of an honest layoff (they even pretend to be constantly hiring, to present an image of unyielding growth) so they lie and call it "performance". An existing stack-ranking regime helps. What these companies are really doing is throwing their own people under the bus to preserve their own reputations, and they shouldn't be surprised when people fuck them right back for it.

xradionut 13y ago
Stop bagging on Microsoft! ;)

jbooth 13y ago

The thing I really don't understand is the persistent meme that companies have some obligation to their shareholders above and beyond their obligation to their employees, common ethics or the spirit of the law. It's practically an article of faith in the business community that you deserve an 'attaboy' for laying a bunch of people off if it increases profit. But stiff the shareholders? Oh, the humanity! We're developing morals all of a sudden! If all's fair in business, why don't we treat the shareholders as suckers, too? If enough of them get together, they can vote to fire you, but short of that, why do they deserve additional respect?

csbrooks 13y ago
Coincidentally, the executives making the decisions are shareholders, too.
- AsymetricCom 13y ago
  This seems to me that you're saying that they shouldn't be responsible for their failure. This leads to the discussion of whether or not people who start or back failed/failing businesses have made a net contribution to society or are simply leaching off the contributions/momentum of others. Obviously, there is a balance to these things. You're both contributing and leeching with a failed business. Monopolies are the same as well. Each one can be abused or used to create a contribution or to coopt value. What really matters is when you're all said in done, is everyone, including the employees, better off?
- wmeredith 13y ago
  Ding, ding, ding. The people calling the shots are more invested in the share price than in some public perception of the company, that is until the bad PR affects the share price.
rayiner 13y ago
Business ethics is dead in America. It has been replaced by faith in the market, the belief that market outcomes are intrinsically moral.

venomsnake 13y ago

Mass unemployment is one of the greatest plagues of a modern country. This is just one of the (many) sad side effects. Too bad the lesson was forgotten globally by the ruling class.

consonants 13y ago
Mass unemployment ensures that there is always someone who will trade their labor for the lowest possible price so that they don't starve. It's built into the system, less of a plague and more of necessary requisite for capitalism.
- venomsnake 13y ago
  Nope. Inflation and unemployment are built in. Hyperinflation and big unemployment are tumors. They should be kept in a goldilocks range preferably around 3-4%. If you have labor shortage the economy cannot grow as fast as possible. If you have big surplus - then you have big demand slump that moves you to a deflation spiral.
  - consonants 13y ago
    Thanks for the correction.

dominic_cocch 13y ago

There must be some kind of study about businesses that are loyal to employees and loud about that loyalty. How does that affect their bottom line? Do customers/clients choose to do business with an ethical company over an unethical one? If not, maybe the bigger problem is that the employees of the world choose to do business with companies that are not good to employees. If ethical behavior was an important factor in customer's choices I'm sure we'd see less unethical behavior by businesses. However, Walmart, Goldman Sachs, McDonalds, etc all continue to thrive after their unethical behavior is made very public.

xradionut 13y ago
In the case of many consumers and Walmart, the consumer doesn't have the money to pay for the alternative. It's the only affordable market in their area. In the case of Goldman Sachs, consumers are not involved, the company has so much power, no one in government dares to strongly enforce the laws, short of a slap on the wrist. In a utopian "ethical" world, GS would have been dead in the 1930s...

300bps 13y ago

This ignores the fact that many downturn layoffs are merely excuses to rid a company of dead weight. It's expensive and risky to let someone go for cause. It's cheap and virtually risk free to do a mass layoff due to a decline in business.

socrates1998 13y ago

Yeah, it sucks to be fired. But, if you were worth more to your company than you are being paid, then they wouldn't have fired you. This is tough to hear, but it is the truth. Some might say that the company was wrong, and that may be true, but if the company is wrong about who it fires and hires, it will no longer be a company. Your company is extracting value from you, that is how they make money. If you are not looking for a way out or up, then you are going to lose. Managing your career is something people just don't think about enough. They like to think, "If I am loyal and work hard, then I will always have a job." That's bullshit. I have known lots of people who worked hard and were loyal, but still got axed because they didn't create enough value. This article has a "it's not fair" quality to it. Well, no shit it's not fair. Because we spend so much time at work, we project loyalty and security onto our company. We are fooled into thinking they are loyal to us.

JoeAltmaier 13y ago
Not the whole storey. E.g. I plant 4 tomato plants. When they are half-grown, I pull up 2. Not because they each aren't worth more than the cost to me; but because I have water, soil, light, room enough for only 2. So Its also naïve to think you're fired because you're not a profitable employee. Sometimes you get fired because it makes a large equation work out better.

fnordfnordfnord 13y ago

In tough times, in good times, anytime it becomes advantageous to do so. Isn't that what the "Lean" discipline boils down to?

beefxq 13y ago

The future is contracting/consulting. There will be no more full time employees.