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(Time)   Businesses are learning that by downsizing the workforce they are, in effect, destroying their bottom line   (business.time.com) divider line 162
    More: Ironic, layoffs, MIT Sloan, Red Lobster, Domino's Pizza, morale, businesses  
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5974 clicks; posted to Business » on 28 Apr 2013 at 8:37 PM (50 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-04-28 07:34:18 PM
You mean that cutting long term investments (a loyal and competent work force) in favor of short term gains (boost in profit and budget) would backfire!?

Shocked...you can color me it
 
2013-04-28 07:52:06 PM
Businesses don't understand the relationship between their employees and their customer base. They keep laying off people and doing everything they can to drive down the wages of the people they do retain, and then can't understand why no one seems to be spending any money on their product or service.

One Fortune 50 company I worked for was in the process of a major off-shoring and downsizing effort. They released a quarterly financial report and in the accompanying explanation they cited "uncertainty in the employment sector" as one of the major factors for their decline in revenues. Forest? Trees? Hello?
 
2013-04-28 07:53:40 PM
Red Lobster eliminated  busboys, demoted servers, and increased tables/server from 3 to 4.   Now they've learned their lesson and reduced tables/server back to 3.

Whar busboys and promotions?
 
2013-04-28 07:54:33 PM
That's what happens when you allow the professional investor class to run things.
 
2013-04-28 08:04:05 PM

Fark Me To Tears: One Fortune 50 company I worked for was in the process of a major off-shoring and downsizing effort. They released a quarterly financial report and in the accompanying explanation they cited "uncertainty in the employment sector" as one of the major factors for their decline in revenues. Forest? Trees? Hello?


And speaking of off-shoring... Employers, when you send your jobs off-shore and lay off your domestic employees, just where do you think your wage dollars are going to be spent?

Even if you pull the completely illegal* stunt of replacing American workers with H-1Bs, most of the money that you're playing them is still going out of the country, usually back home. Unless your company also make sales in that other country, you're basically letting air out of the balloon. It amazes me that all these overpaid MBAs don't see that.

* - It is illegal to hire an H-1B for the purpose of displacing an American worker. Even if you can justify that the H-1B is truly an augmentation and not a displacement, it is also illegal to pay that H-1B a wage that is less than the prevailing wage of his American-worker counterparts. And yet, H-1Bs are routinely brought into this country to displace American workers and they are typically paid much less than those American workers were paid.
 
2013-04-28 08:09:55 PM
fta The burden becomes too much for workers to bear, and when employees are overwhelmed and can't keep up with their duties, it's just plain bad for business.

So? Fire them. Or beat them. Or beat them and then fire them. The point is to abuse those slackers so much that you strike fear into the hearts of those who haven't quit yet.
 
2013-04-28 08:24:40 PM
I remember when Circuit City fired all their top sales staff and replaced them with school leavers on far lower pay. I also remember what then happened to Circuit City....
 
2013-04-28 08:41:14 PM
Fire the experienced help, hire schlubs/Inidans/Messicans at 1/3 the cost.  Bottom line is pretty for 1 quarter. Get bonus, Quit. Bazinga!

Hate management.  No better than leeches in the IT worlld.
 
2013-04-28 08:43:31 PM

Aar1012: You mean that cutting long term investments (a loyal and competent work force) in favor of short term gains (boost in profit and budget) would backfire!?

Shocked...you can color me it


The frustrating thing is that this pattern of behavior, where long-term growth and stability are sacrificed for next quarter's profit, has been a freaking cancer  on American business for at least the last 30-40 years.
 
2013-04-28 08:45:55 PM

HMS_Blinkin: Aar1012: You mean that cutting long term investments (a loyal and competent work force) in favor of short term gains (boost in profit and budget) would backfire!?

Shocked...you can color me it

The frustrating thing is that this pattern of behavior, where long-term growth and stability are sacrificed for next quarter's profit, has been a freaking cancer  on American business for at least the last 30-40 years.


For a cancer patient, the American economy looks remarkably healthy.
 
2013-04-28 08:48:10 PM

DKinMN: HMS_Blinkin: Aar1012: You mean that cutting long term investments (a loyal and competent work force) in favor of short term gains (boost in profit and budget) would backfire!?

Shocked...you can color me it

The frustrating thing is that this pattern of behavior, where long-term growth and stability are sacrificed for next quarter's profit, has been a freaking cancer  on American business for at least the last 30-40 years.

For a cancer patient, the American economy looks remarkably healthy.


It's like pancreatic cancer. You look and feel fine. Until you don't. And then you die.
 
2013-04-28 08:50:59 PM
The problem is I doubt we will return to viable equilibrium without skull cracking and goo feasting. The system is just too far stacked toward the new "ruling class" for it to be changed from within.
 
2013-04-28 08:55:48 PM
So, underpaid, overworked employees don't always provide the best customer service and that's bad for business? No shiat. The real problem is that a free-market economy is driven by "bottom-up" consumer spending, and not the meager "trickle-down" money that the rich deign to disperse to the lower classes. If the average person is living paycheck to paycheck, they're not able to spend money on goods and services beyond the bare necessities. As long as this trend continues, the average actual revenue and profits of corporations (minus accounting tricks) will continue to decline. The ultra-rich make their money from virtual investments such as hedge funds, commodities speculation, REITs, etc. As the real value behind those entities continues to erode, there will come a time when everyone realizes it's just one big circle-jerk, and we'll have another economic collapse on the scale of the Great Depression. Let's hope it doesn't get to that point.

/ is that politics-tab-grad derp?
 
2013-04-28 09:00:55 PM
Every time I see an article about this, it makes my head hurt and I wind up screaming ,"5 dollar day!," at the computer.

In 1908 Ford figured this out.  Pay people a good wage, they get pride of ownership, you get a loyal, high quality workforce, and *gasp* when your workers make enough to afford the product they produce/sell they actually buy said products and services, which increases the customer base.  Higher quality products and services coupled with an expanded consumer base leads to a better bottom line.

Holy shiat people, this isn't hard.
 
2013-04-28 09:01:20 PM

Fark Me To Tears: Fark Me To Tears: One Fortune 50 company I worked for was in the process of a major off-shoring and downsizing effort. They released a quarterly financial report and in the accompanying explanation they cited "uncertainty in the employment sector" as one of the major factors for their decline in revenues. Forest? Trees? Hello?

And speaking of off-shoring... Employers, when you send your jobs off-shore and lay off your domestic employees, just where do you think your wage dollars are going to be spent?

Even if you pull the completely illegal* stunt of replacing American workers with H-1Bs, most of the money that you're playing them is still going out of the country, usually back home. Unless your company also make sales in that other country, you're basically letting air out of the balloon. It amazes me that all these overpaid MBAs don't see that.

* - It is illegal to hire an H-1B for the purpose of displacing an American worker. Even if you can justify that the H-1B is truly an augmentation and not a displacement, it is also illegal to pay that H-1B a wage that is less than the prevailing wage of his American-worker counterparts. And yet, H-1Bs are routinely brought into this country to displace American workers and they are typically paid much less than those American workers were paid.


I get your point that H1-B workers may not benefit the economy as well as American workers.

However, work is more mobile than ever. If you scrap the H1-B program, companies will simply ship the work overseas. Then the benefit of the work ONLY benefits foreigners. At least with H1-B the workers pay taxes here, along with whatever they have to spend to live.

Given the choice between "some" and "nothing", I suggest we get "some".
 
2013-04-28 09:03:15 PM

Fark Me To Tears: Fark Me To Tears: One Fortune 50 company I worked for was in the process of a major off-shoring and downsizing effort. They released a quarterly financial report and in the accompanying explanation they cited "uncertainty in the employment sector" as one of the major factors for their decline in revenues. Forest? Trees? Hello?

And speaking of off-shoring... Employers, when you send your jobs off-shore and lay off your domestic employees, just where do you think your wage dollars are going to be spent?

Even if you pull the completely illegal* stunt of replacing American workers with H-1Bs, most of the money that you're playing them is still going out of the country, usually back home. Unless your company also make sales in that other country, you're basically letting air out of the balloon. It amazes me that all these overpaid MBAs don't see that.

* - It is illegal to hire an H-1B for the purpose of displacing an American worker. Even if you can justify that the H-1B is truly an augmentation and not a displacement, it is also illegal to pay that H-1B a wage that is less than the prevailing wage of his American-worker counterparts. And yet, H-1Bs are routinely brought into this country to displace American workers and they are typically paid much less than those American workers were paid.




MBAs don't care about long-term investment. Their only concern is making the next quarter's numbers look good so they can collect their bonuses and stock options.
 
2013-04-28 09:05:40 PM

Thingster: Every time I see an article about this, it makes my head hurt and I wind up screaming ,"5 dollar day!," at the computer.

In 1908 Ford figured this out.  Pay people a good wage, they get pride of ownership, you get a loyal, high quality workforce, and *gasp* when your workers make enough to afford the product they produce/sell they actually buy said products and services, which increases the customer base.  Higher quality products and services coupled with an expanded consumer base leads to a better bottom line.

Holy shiat people, this isn't hard.


105 years later, and in some ways we've measurably regressed as a society.  It's sad.
 
2013-04-28 09:05:54 PM

reported: / is that politics-tab-grad derp?


Meh, I didn't mean derp, I meant rant. I'm just too tired and distracted now to make my point effectively.
 
2013-04-28 09:06:13 PM
reisman.lohudblogs.com
Oblig.
 
2013-04-28 09:09:44 PM
Some businesses have a less-than-current model and can suffer for it. Efficiency needs to be balanced with practicality.

/Easy words
//Business analysts shouldn't be the final word in a model
 
2013-04-28 09:11:23 PM
Businesses are learning?

I highly doubt that.
 
2013-04-28 09:16:15 PM

Flint Ironstag: I remember when Circuit City fired all their top sales staff and replaced them with school leavers on far lower pay. I also remember what then happened to Circuit City....


However, the arrogance of some of these people is such that they think that THEY will somehow be the ones to make it work...or if not, they'll get out with a profit before it craters.
 
2013-04-28 09:17:53 PM

Summoner101: Businesses are learning?

I highly doubt that.


No, they're regressing by firing experienced employees and losing the intangible but vital "Institutional Knowledge" their experienced employees possess.
 
2013-04-28 09:22:24 PM

Evil Twin Skippy: DKinMN: HMS_Blinkin: Aar1012: You mean that cutting long term investments (a loyal and competent work force) in favor of short term gains (boost in profit and budget) would backfire!?

Shocked...you can color me it

The frustrating thing is that this pattern of behavior, where long-term growth and stability are sacrificed for next quarter's profit, has been a freaking cancer  on American business for at least the last 30-40 years.

For a cancer patient, the American economy looks remarkably healthy.

It's like pancreatic cancer. You look and feel fine. Until you don't. And then you die.


United States = the "Steve Jobs" of "First World" nations...
 
2013-04-28 09:23:49 PM
Red Lobster spokesperson told the Orlando Sentinel that while some customers liked the four-table policy, once it was introduced around the country, "far more folks told us that in some instances, it really turned out to be a barrier to providing that great guest experience."

I would love to speak to the mythical customers who said waitresses spending even less time taking care of their dining needs was an improvement.

What make-believe PR nonsense.
 
2013-04-28 09:24:14 PM
Its funny how business analysts have no common sense. Anyone in here (and Fark is filled with crazies) saw this as the only outcome to continuous downsizing.
 
2013-04-28 09:26:27 PM

Thingster: Every time I see an article about this, it makes my head hurt and I wind up screaming ,"5 dollar day!," at the computer.

In 1908 Ford figured this out.  Pay people a good wage, they get pride of ownership, you get a loyal, high quality workforce, and *gasp* when your workers make enough to afford the product they produce/sell they actually buy said products and services, which increases the customer base.  Higher quality products and services coupled with an expanded consumer base leads to a better bottom line.

Holy shiat people, this isn't hard.


As if you still need to actually make products to make money.  This ain't 1913, pal.  Times change.  If your business actually needs real products for real customers, you're in the wrong business.

Labor was only marginally useful in making money back then.  Now, it is pretty much unnecessary, 'cept for Red Lobster.
 
2013-04-28 09:27:26 PM
You really believe its about the bottom line?

its about control.

Always has been.

/ If you dont belong to a Union, you deserve what you get.
 
2013-04-28 09:30:45 PM

Flint Ironstag: I remember when Circuit City fired all their top sales staff and replaced them with school leavers on far lower pay. I also remember what then happened to Circuit City....


Bonuses are sometimes paid to executives closing a company's doors for good. Circuit City Stores Inc. won approval, over Justice Department objections, to pay $2.3 million in bonuses to top executives for overseeing the company's liquidation during the height of the financial crisis. The retailer's demise eliminated more than 39,000 jobs.

http://online.wsj.com/article/SB1000142405311190370360457658448075054 5 602.html

The point of a business is for the guys at the top to make money.  You know, the capitalists.  They made money by killing Circuit City.

And nothing of value was lost.
 
2013-04-28 09:32:17 PM

sendtodave: Thingster: Every time I see an article about this, it makes my head hurt and I wind up screaming ,"5 dollar day!," at the computer.

In 1908 Ford figured this out.  Pay people a good wage, they get pride of ownership, you get a loyal, high quality workforce, and *gasp* when your workers make enough to afford the product they produce/sell they actually buy said products and services, which increases the customer base.  Higher quality products and services coupled with an expanded consumer base leads to a better bottom line.

Holy shiat people, this isn't hard.

As if you still need to actually make products to make money.  This ain't 1913, pal.  Times change.  If your business actually needs real products for real customers, you're in the wrong business.

Labor was only marginally useful in making money back then.  Now, it is pretty much unnecessary, 'cept for Red Lobster.


Hence "products and services"

/I realize you aren't being serious, but I put that in there anticipating someone making this argument sincerely.
 
2013-04-28 09:34:56 PM

Summoner101: Businesses are learning?

I highly doubt that.


This - Malaysian monkey trap. you can't change primate behavior. the wealthy and powerful know exactly how they caused the last great depression, and they are going to cause another one by doing the exact same things, because they literally cannot stop themselves - because they are apes, like the rest of us.
The Koch Brothers and Rupert Murdoch can no more stop themselves than a crack-addicted ghetto-rat can stop himself from robbing a liquor store. It's ape programming.
 
2013-04-28 09:36:56 PM
At the time, Red Lobster said the changes were being made after testing showed that diners and restaurant employees alike approved of the new policies.

Yeah, calling bullshiat on that testing.  I'm sure notice of increased workload WITH decrease pay to go with it was SO POPULAR, you lying assed mother farkers.
 
2013-04-28 09:37:29 PM
"Bu-bu-but how is we gonna pay our executives and board of directors and stockholders their whole buncha heap-o-money if we don't employ only one person per branch?!?!?"

*Scrounges through closet for shocked face*
 
2013-04-28 09:38:53 PM

Heraclitus: You really believe its about the bottom line?

its about control.

Always has been.

/ If you dont belong to a Union, you deserve what you get.


Except that a lot of non-union places will parachute in the legal team if the word "Union" is so much as uttered by an employee. Hell, I bet that the anti-union law teams of some corporations is larger than the payroll to the low level employees
 
NFA [TotalFark]
2013-04-28 09:41:20 PM
Once the management of any company begins to believe it's most valuable asset is anything but it's workforce, they've began walking the path to bankruptcy.
 
2013-04-28 09:44:20 PM

Heraclitus: You really believe its about the bottom line?

its about control.

Always has been.

/ If you dont belong to a Union, you deserve what you get.


When someone asks you what you do, and you respond with your profession (because we are what we do), do you add the caveat that you actively try to make yourself less valuable to your employer?

It's simple.  The reason anyone has a job is to make money for the bosses.  And the more money they make for the bosses, the more valuable they are.  Conversly, the more money they take from their bosses, the less valuable they are.

"Oh!  But I am skilled!"

I have two guys making widgets.  One is skilled, and makes $2 worth of widgets.  I pay him $1.50 for his skill.  The other is not skilled, and makes only $1 worth of widgets.  I only pay him $.50.  Who makes me more money?

So, I hire 20 of the unskilled guys, which makes me $10 in widgets, and saves me $20 in labor cost over hiring skilled workers!  And then, when I fire them all, I save another $10 in labor cost, which is as much at my product is worth!

Cha-ching! Pass go, collect $200M bonus!

Dig a whole, fill it up.  With workers.
 
2013-04-28 09:48:34 PM

sendtodave: Heraclitus: You really believe its about the bottom line?

its about control.

Always has been.

/ If you dont belong to a Union, you deserve what you get.

When someone asks you what you do, and you respond with your profession (because we are what we do), do you add the caveat that you actively try to make yourself less valuable to your employer?

It's simple.  The reason anyone has a job is to make money for the bosses.  And the more money they make for the bosses, the more valuable they are.  Conversly, the more money they take from their bosses, the less valuable they are.

"Oh!  But I am skilled!"

I have two guys making widgets.  One is skilled, and makes $2 worth of widgets.  I pay him $1.50 for his skill.  The other is not skilled, and makes only $1 worth of widgets.  I only pay him $.50.  Who makes me more money?

So, I hire 20 of the unskilled guys, which makes me $10 in widgets, and saves me $20 in labor cost over hiring skilled workers!  And then, when I fire them all, I save another $10 in labor cost, which is as much at my product is worth!

Cha-ching! Pass go, collect $200M bonus!

Dig a whole, fill it up.  With workers.


Actually, it's become "Fire half the unskilled workers and demand that the remainder continue to make $10 in widgets while decreasing pay since the economy is down and, hey, they're lucky to have a job"

Pass go and collect $200M bonus plus stock options for "synergizing outside the box"
 
2013-04-28 09:50:32 PM

NFA: Once the management of any company begins to believe it's most valuable asset is anything but it's workforce, they've began walking the path to bankruptcy.


as·set /ˈaset/
Noun

A useful or valuable thing, person, or quality: "quick reflexes were his chief asset".
Property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.


Nope, not seeing it.

ex·pense /ikˈspens/
Noun

The cost required for something; the money spent on something.


Ah, there we go.
 
2013-04-28 09:51:45 PM

Thingster: In 1908 Ford figured this out.  Pay people a good wage, they get pride of ownership, you get a loyal, high quality workforce, and *gasp* when your workers make enough to afford the product they produce/sell they actually buy said products and services, which increases the customer base.  Higher quality products and services coupled with an expanded consumer base leads to a better bottom line.



What Henry Ford did in that generation is almost impossible with the current work force. Now days before people get hired at a company they think they are getting screwed and enter the company work force thinking they deserve more for just being there. The mentality builds until they are truly dissatisfied and then they started the process over at another job. I've seen it at past jobs and see it at the current one. The issue is compounded by recent college grads who think they will make CEO of a Fortune500 company 5 years out of school with only a 4 year management degree.

We've produced a work force in this country who thinks they deserve more than what they have now and blame whoever they are working for at that moment regardless of how nice they have it.
 
2013-04-28 09:52:48 PM

Aar1012: Actually, it's become "Fire half the unskilled workers and demand that the remainder continue to make $10 in widgets while decreasing pay since the economy is down and, hey, they're lucky to have a job"

Pass go and collect $200M bonus plus stock options for "synergizing outside the box"


I like the way you think, kid.  You're going places.
 
2013-04-28 09:54:17 PM
When I waited tables at Red Lobster in the mid-90s, we had no bussers and running four tables at a time was the norm. The only people who couldn't provide good service to four tables at a time were noobs.
 
2013-04-28 09:57:21 PM

Fark Me To Tears: * - It is illegal to hire an H-1B for the purpose of displacing an American worker. Even if you can justify that the H-1B is truly an augmentation and not a displacement, it is also illegal to pay that H-1B a wage that is less than the prevailing wage of his American-worker counterparts. And yet, H-1Bs are routinely brought into this country to displace American workers and they are typically paid much less than those American workers were paid.


Try hiring an engineer with actual experience sometime.  The only people you are going to get are foreign workers.  And immigration is good for the economy.  Especially since we aren't kicking out the kids like we should.

/on average my H-1B workers are paid much more than their American counterparts.  They usually come to the table with advanced degrees and less shiatty attitude
 
2013-04-28 09:59:31 PM

aimtastic: When I waited tables at Red Lobster in the mid-90s, we had no bussers and running four tables at a time was the norm. The only people who couldn't provide good service to four tables at a time were noobs.



That's the spirit!  And you sure didn't want to look like a noob, I bet!  Of course not!

You worked hard to show the bosses that you are a hard worker, not for silly things like "better pay" or "a better working environment."  Good for you, and good for your bosses!

See?  Inspiring competition among the help keeps labor costs down!
 
2013-04-28 10:02:47 PM
When can we start executing "Consultants" and idiot Managers who decide that employees are Cost Centers to be eliminated?  Preferably with fire.  We should kill them with fire.

"Pish posh!  Busboys!  They don't bring in money!  All they do is COST money!  Get rid of the lot!"
 
2013-04-28 10:03:38 PM

Phil McKraken: I get your point that H1-B workers may not benefit the economy as well as American workers.

However, work is more mobile than ever. If you scrap the H1-B program, companies will simply ship the work overseas. Then the benefit of the work ONLY benefits foreigners. At least with H1-B the workers pay taxes here, along with whatever they have to spend to live.

Given the choice between "some" and "nothing", I suggest we get "some".


The problem is that the H1-B (and every other guest worker program remotely like it) program misreads the whole supply and demand thing when it comes to labor.  It enables fraud on the level that claimed "shortages" never happen to raise costs, when they're actually surpluses that act to marginalize and oppose citizens.  That, and none of those programs are designed to ever result in productive US citizens despite the opportunity.

Kill it (and the cheerleaders/enablers of it) with fire, nuke it from orbit, repeat, and consider the foregone revenue a sunk cost.  Then make offshoring just as painful in its death.   If any interests complain(i.e. they do it through K Street), start using the legal tools that we have in place to make them regret the whole practice.  If businesses are willing to play hardball with people to marginalize citizens, be willing to return the favor.  Otherwise you're screwing both the foreigner and the citizen at the same farking time.
 
2013-04-28 10:04:33 PM

sendtodave: aimtastic: When I waited tables at Red Lobster in the mid-90s, we had no bussers and running four tables at a time was the norm. The only people who couldn't provide good service to four tables at a time were noobs.


That's the spirit!  And you sure didn't want to look like a noob, I bet!  Of course not!

You worked hard to show the bosses that you are a hard worker, not for silly things like "better pay" or "a better working environment."  Good for you, and good for your bosses!

See?  Inspiring competition among the help keeps labor costs down!


No, I worked harder because it did garner me better pay in the form of tips. Every server in America worth their salt likely regards themselves more as an independent contractor than an employee of the restaurant in which they work. As long as the restaurant draws customers, every server is the master of their own destiny once those customers are seated at their tables.
 
2013-04-28 10:05:19 PM

Fark Me To Tears: * - It is illegal to hire an H-1B for the purpose of displacing an American worker. Even if you can justify that the H-1B is truly an augmentation and not a displacement, it is also illegal to pay that H-1B a wage that is less than the prevailing wage of his American-worker counterparts. And yet, H-1Bs are routinely brought into this country to displace American workers and they are typically paid much less than those American workers were paid.


The Grigsby & Cohen law firm(and many traitors like them) would like to disagree with you.
 
2013-04-28 10:05:37 PM
another funny thing about waiters and workers in general. some just want to make X dollars a week. when i was a waiter i didn't give a crap if someone tipped me a penny. i didn't care i was making 2/3 as much as the waiters busting their asses. i was single without  kids or debt and i had cheap hobbies and interests so i had more money in my pocket the end of the week. its not how much you make but how little you spend.
 
2013-04-28 10:08:13 PM

aimtastic: No, I worked harder because it did garner me better pay in the form of tips. Every server in America worth their salt likely regards themselves more as an independent contractor than an employee of the restaurant in which they work. As long as the restaurant draws customers, every server is the master of their own destiny once those customers are seated at their tables.


Or that independent contractors are largely used by shiatty employers to show their general distrust of their workers.  Few exceptions.
 
2013-04-28 10:13:07 PM
farm4.staticflickr.com
"Management decisions often involve trial and error."
 
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