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Thread summary:

Personnel reductions : cost cutting, service quality, technology upgrades, automation

 
Old 08-20-2007, 04:52 PM
 
Location: VA
786 posts, read 4,453,600 times
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I get a kick out of the announcements made by companies that are laying off huge numbers of its employees. They may lay off 30% of their staff but always insist it will have no negative affect on the services it offers to its customers. They maintain that it is strictly a cost cutting move and business is still great.

My question is this: if the company can cut 30% of its workforce without affecting the services it provides to customers and clients then why did they employ these workers in the past? Were the laid off employees all doing busy work that had no effect on the customers before they were let go?

Business experts, please explain this?
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Old 08-20-2007, 05:01 PM
 
11,368 posts, read 46,978,471 times
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I'm no expert beyond my own experience of owning and running a business (or two) ... but the sketch of information you've provided doesn't tell us very much.

What type of work product and customer support did this company have?

Is it possible that new technology or products have made a lot of the jobs unneeded?
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Old 08-20-2007, 06:51 PM
 
Location: Sacramento
13,869 posts, read 24,760,845 times
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Quote:
Originally Posted by Dingler View Post
I get a kick out of the announcements made by companies that are laying off huge numbers of its employees. They may lay off 30% of their staff but always insist it will have no negative affect on the services it offers to its customers. They maintain that it is strictly a cost cutting move and business is still great.

My question is this: if the company can cut 30% of its workforce without affecting the services it provides to customers and clients then why did they employ these workers in the past? Were the laid off employees all doing busy work that had no effect on the customers before they were let go?

Business experts, please explain this?
Technology upgrades, from my experience, allow this to happen. Automation of manual processes often result in substantial personnel savings in large organizations, especially in repetitive processes. This happens in many industries and ancillary services. My own experience include developing and customizing bill paying services within the context of a large organization, and the resultant processes allowing substantial personnel reductions.
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Old 08-21-2007, 08:43 AM
 
5,656 posts, read 17,948,061 times
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If it is customer service, they are offshoring. 30% is the typical savings rate that the offshoring agencies sell to american clients. But it rarely reaches that from what I am hearing.

Although it does get to the point where the companies cut so close to the bone that if one person in the department goes on vacation everything screeches to a halt.

Is that a good way to manage a company? No. Does it make customers angry? Yes.
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Old 08-21-2007, 09:31 AM
 
Location: Marshall-Shadeland, Pittsburgh, PA
31,435 posts, read 70,330,570 times
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If this is retail, then you'll have a lot of unhappy customers. As a veteran customer service associate at a big-box store here in PA (Lowe's), I can tell you that our level of customer satisfaction has certainly declined with each position they slash from our payroll. We are still expected to tend to the needs of the same number of clients, yet we have more limited resources in order to do so. I don't know about other big-box stores, but I do know from experience that in Lowe's and Home Depot just about every customer who walks into our store doesn't have the slightest idea what they are doing and require one-on-one attention, often for at least five minutes at a time. That is something that is now impossible when you're attempting to handle a busy department on your own while you answer the phone, address call buttons, inspect incoming returns, etc. People routinely complain to management about our poor customer service and the fact that they "can't find anybody" to help them, yet we never see any sort of relief.

The understaffing issues at my store in particular has caused the morale of many of my colleagues to decline to a level where I no longer enjoy coming into work and am considering quitting within the next two weeks. Our associates are just tiring of customers becoming agitated and impatient by being forced to wait so much, especially on weekends, due to intentional understaffing, and the atmosphere in the break room during my lunch hour is usually abysmal. The sad thing about this situation is that I know if I quit, my position will probably just be phased out to further reduce expenditures, making it even more difficult on those who remain in the department. It's this "guilt-trip" feeling about abandoning my co-workers that keeps me working at Lowe's. If I could find another employer in Scranton willing to compensate a college student at least $9/hr., then I'd jump at the opportunity. Unfortunately, the economy here is just so awful that we have a lot of people who have Bachelor's Degrees working at Lowe's for much less than they are worth.

A lot of these problems can be attributed to ignorant consumers. They continually want lower and lower prices on the products they purchase. This provides retailers with thinner and thinner profit margins on the items they sell. In order to make up for that loss in profit, they then cut their expenditures (payroll). At the same time, these customers also expect superior customer service, which requires a larger payroll. If a store like Lowe's were to assign one associate to every aisle on the weekends to assist people while slashing our prices to beat Home Depot, the store would be operating at a net loss. Nobody goes into business to lose money, which is why I just don't think big-box stores truly work.
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Old 08-21-2007, 09:50 AM
 
5,656 posts, read 17,948,061 times
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Scranton: I hear you. I worked retail in throughout the 80s. Such terrible working conditions, I vowed I would never work a "big store" retail environment ever again. You get treated like dirt by the customers and by the management. From both ends!

Yes, they are The "rodney dangerfield" jobs... the retail workers get no respect. I am always nice to them. Esp. the ones that actually KNOW something.
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