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I'm tired of stock prices rising because of layoffs, and the assumption that layoffs only cut out deadwood. It takes little effort to look through the list of companies that went through endless layoffs and discover that nothing improved. A company cannot gut itself to success anymore than a person can starve themselves to health.
Insane arguments can be made for layoffs "improving efficiency," but it is not efficient for 1 person to do the work of 2 unless the company believes that overworked and stressed out employees produce the best products and make the fewest mistakes. Sure, I suppose if the work isn't out there, the employees aren't needed, but nobody in their right mind can convince me that 27,000 people at HP were sitting around doing little to nothing each day. And if they are, who's fault is that? Where's the supposed leadership that should be ensuring that the company has enough work to go around?
In most cases, no thought whatsoever goes into the layoff - it is just a quick way to jack up share prices (giving executives a nice time to exercise their backdated stock options) and provides a short-term boost in the amount of cash on-hand. But nothing really changes. The company will lack the needed technical skills and leadership to move forward, the executives clearly see layoffs as a profitable bonus, and HP will continue to slide into the dustbin of history.
This isn't new for HP - the company has been plagued by a long string of useless leaders, many of whom have had ties to various big investment banks and equity firms (Goldman Sachs and Bain Capital) that are clearly stripmining the company to line their own pockets. Recent examples include:
1) Carly Fiorina: She basically gutted the company's brand reputation, laid off a huge pile of people, and started the ball rolling downhill. She was a student of "Neutron Jack" Welch, so this is not surprising; she was also a huge fan of outsourcing and felt that Americans need to "compete" with 3rd world slave labor - note that this did not apply to her pay or bonuses. She eventually was forced out by the company board, though she kept her golden parachute, of course.
2) Mark Hurd then took over. He continued to run the company into the ground and laid off many people (15,000+.) He was eventually forced to resign because of assorted scandals, including harassment and misconduct. Naturally, he kept his golden parachute - he was one of the highest paid CEO's of the time, while he imposed a 5% pay cut on all employees (the ones who were lucky enough to not lose their jobs.)
3) Apotheker: He was the company's leader for less than a year, and he laid people off while making a mountain of bad decisions before being forced out. He still was paid very well for his staggering lack of ability; his total payout was around $13 million, even though the company lost over $30 billion in market capitalization during his brief term.
4) Meg Whitman: The current big-wig in charge, and thus far it seems nothing has changed. Make bad decisions, lay off thousands, and walk away with a big bonus will probably be her career plan as well... it's worked out great for the rest of HP's recent "leaders."
While HP has suffered worse leadership than average, this scenario is repeated over and over again throughout corporate America. Is it any wonder we are in so much trouble as a nation?
Last edited by Rambler123; 05-23-2012 at 04:06 PM..
Cool, my share of HP went up... This is ridiculous though. When companies can't perform because of terrible management, lack of direction and planning, the worker bares the brunt. The shareholders get a little kick while their stock ticks up a little, after dropping 40%, and the cycle continues. That broad running HP aught get the boot. I should have sold my shares years ago, but I have a bad habit of holding my losers thinking they will turn things around. Misplaced faith I'm afraid, especially with this awful company. Now I've got to be on the lookout for a strategic exit.
I wish we went back to the old days, when the equities markets weren't the equivalent of the wild west... Companies actually being run competitively, instead of layoffs being the default go to solution when a company can't perform. No wonder America is a sinking ship.
they will probably move some of it overseas, hire 100 people for the price of 1 worker in america
Yes, because they can. I don't know what the geniuses in our government thought would happen when they opened up the floor gates for jobs leaving the country. America is not a competitive nation on the global level. The reason for our success for so long was a well insulated economy. Americans themselves are not competitive on the global scale. They expect too much for too little. Yes, we will get knocked down a few pegs as a result, as we are seeing.
I'm tired of stock prices rising because of layoffs, and the assumption that layoffs only cut out deadwood. It takes little effort to look through the list of companies that went through endless layoffs and discover that nothing improved. A company cannot gut itself to success anymore than a person can starve themselves to health.
I disagree. People play the stock market to make money.
The stock will be worth more in the short term. No question about. They are saving 3 billion dollars a year in salary.
Obviously HP can not lay off 27,000 people without it having some negative consequences. But they are going to take a year or so to come about. Say a chunk of these people are laptop repair workers. Its going to take about a year for word to spread that it now takes 2 weeks rather then 1 week to get a laptop repaired.
It will effect sales, but it is going to take time for word of the reduced support level to be known by consumers.
Plus workers tend to pick up the slack in the short term. If someone leaves my company, and it takes a month to get a new person in there as a replacement, everyone pitches in to help out.
when it lasts 6+ months, people are not going to have that kind of spirit
I'm tired of stock prices rising because of layoffs, and the assumption that layoffs only cut out deadwood. It takes little effort to look through the list of companies that went through endless layoffs and discover that nothing improved. A company cannot gut itself to success anymore than a person can starve themselves to health.
Insane arguments can be made for layoffs "improving efficiency," but it is not efficient for 1 person to do the work of 2 unless the company believes that overworked and stressed out employees produce the best products and make the fewest mistakes. Sure, I suppose if the work isn't out there, the employees aren't needed, but nobody in their right mind can convince me that 27,000 people at HP were sitting around doing little to nothing each day. And if they are, who's fault is that? Where's the supposed leadership that should be ensuring that the company has enough work to go around?
In most cases, no thought whatsoever goes into the layoff - it is just a quick way to jack up share prices (giving executives a nice time to exercise their backdated stock options) and provides a short-term boost in the amount of cash on-hand. But nothing really changes. The company will lack the needed technical skills and leadership to move forward, the executives clearly see layoffs as a profitable bonus, and HP will continue to slide into the dustbin of history.
This isn't new for HP - the company has been plagued by a long string of useless leaders, many of whom have had ties to various big investment banks and equity firms (Goldman Sachs and Bain Capital) that are clearly stripmining the company to line their own pockets. Recent examples include:
1) Carly Fiorina: She basically gutted the company's brand reputation, laid off a huge pile of people, and started the ball rolling downhill. She was a student of "Neutron Jack" Welch, so this is not surprising; she was also a huge fan of outsourcing and felt that Americans need to "compete" with 3rd world slave labor - note that this did not apply to her pay or bonuses. She eventually was forced out by the company board, though she kept her golden parachute, of course.
2) Mark Hurd then took over. He continued to run the company into the ground and laid off many people (15,000+.) He was eventually forced to resign because of assorted scandals, including harassment and misconduct. Naturally, he kept his golden parachute - he was one of the highest paid CEO's of the time, while he imposed a 5% pay cut on all employees (the ones who were lucky enough to not lose their jobs.)
3) Apotheker: He was the company's leader for less than a year, and he laid people off while making a mountain of bad decisions before being forced out. He still was paid very well for his staggering lack of ability; his total payout was around $13 million, even though the company lost over $30 billion in market capitalization during his brief term.
4) Meg Whitman: The current big-wig in charge, and thus far it seems nothing has changed. Make bad decisions, lay off thousands, and walk away with a big bonus will probably be her career plan as well... it's worked out great for the rest of HP's recent "leaders."
While HP has suffered worse leadership than average, this scenario is repeated over and over again throughout corporate America. Is it any wonder we are in so much trouble as a nation?
Exactly, and Meg Whitman ran for Gov. of CA and thankfully lost.
She tried to buy the election and used her own money.
And yes, some of these jobs are going overseas. Yes Meg, that helps CA and the nation by putting more Americans out of work.
People need to wake up in this country, neither party has the interest of the American people.
No doubt the actual layoff count will be far lighter. Corps almost always compare costs of staffing vs budgeted positions, not filled, and they count budgeted unfilled eliminated in projecting job cuts to analysts.
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