Comments on: Cutting Staff to Join In?

By: Phyl

Phyl — Wed, 10 Dec 2008 20:49:24 +0000

I think it’s a mixture of things, and one of the big reasons is greed. A company sees that it can justify getting rid of staff, while requiring the remaining staff to create the same level of output, and even if they don’t need to get rid of people, they do it anyway, to make more money. And they kill the remaining staff in the meantime, who tries to keep up with the extra workload.

Plus – some cuts are simply stupid. During the oil industry downturn in the late 90s, a friend said the oil companies were laying off their exploration depts — who were the ones who would find new oilfields and bring in new revenue — while keeping the bean counters, who mainly counted existing beans and didn’t come up with new revenue sources. It was the stupidest way they could possibly have behaved, but it was the standard way everyone reacted.

By: WTL

WTL — Thu, 27 Nov 2008 20:45:13 +0000

I think companies are realizing that this downturn may last a long time, and that they have to protect themselves. One of the largest expenses web companies have is staff, so if they’re still running on savings or VC money, they *have* to cut back at very least for the appearance of trying to be fiscally responsible in case they need another round of funding down the road.

It’s unfortunate, sure, but sometimes, you have to sacrifice a few to make sure the business can stay afloat.

By: David "CrazyKinux" Perry

David "CrazyKinux" Perry — Thu, 27 Nov 2008 20:21:14 +0000

Here’s my peeve with these layoffs: why is it that businesses only take a close look at their expense when times are tough, and why is it that they get ride of their most valuable asset, their employees.

Whenever I hear about massive layoffs, the first thing that comes to mind is poor management. Oh, so now that times are tough they start making the tough decision and make their companies more effective and productive. This should always be a priority, whether in good times or tough times.

It’s not too difficult to manage a business when times are tough, but you can truly appreciate great management when times are tough.

By: Brad Leclerc

Brad Leclerc — Thu, 27 Nov 2008 19:46:29 +0000

I think most of them probably aren’t necessary, but some no doubt are. It’s hard to draw the lines at where that separation is though. The effect of the PERCEPTION of the current state of the economy is far strong than any practical effect the economy can have on the public…so there is ALWAYS overkill in things like down-sizing (or up-sizing as the case may be).

If each company did it’s own research as to the likely effect of the current economic issues I’m sure that MANY of them would notice just how little they would be affected on a practical level, and how much of their opinion of the situation is based purely on perception.

It’s a simple supply and demand issue really. The actual value of any product means less than the perceived value…which in turn means the cost of the product is not necessarily a reflection on quality or anything do do with the product itself so long as people perceive it a certain way.

Economics is tricky…and I’m certainly no expert…just my 2 cents.

By: Andrew

Andrew — Thu, 27 Nov 2008 19:43:38 +0000

I won’t say all are necessary but you need to remember that profits are reported either annually, or quarterly at best. Third quarter earnings may have been massive, but they will know what is happening now and will be making predictions based on emerging trends.

A significant slow down in custom, impending deflation (in some markets), and greater competition from price wars mean that a company that doesn’t prepare now may find itself outgunned and slipping quickly to the bottom of the pile.