Dear employer, layoffs, staff cuts, restructuring, elimination of jobs, outsourcing, ... are different ways of saying the same: to reduce staff. Recent cases are announced, for example, Citigroup (17,000), Delphi (8500) which includes the closure of the plant in Cadiz, Seat (1600) or Sony Computer Entertainment (160) has responsibility for the PlayStation. At the corporate level reductions are "not significant", less than 10% of all employees, in the case of Citigroup are 17,000 face more of the 300,000 worldwide.
An article in this month of April of the journal Knowledge Wharton refers to cutting jobs as business strategy and not just to praise it. Take the case of company Circuit City Stores , the U.S., which is engaged in the retail distribution of electronics and that on March 28 announced a workforce reduction of 3,400 people, equivalent to 7% of the total. Its sales in 2006, were 11,597 million and profit before tax of 239.1 million dollars that they represent an increase of 132.6% over the previous year. In 2004 it had a workforce of 43,211 people and 46,000 in 2006. The argument that the address given for the reduction is that the sellers (mostly part of the structure of staff) are paid above the market, namely 51 cents per hour. The media company also said it hired new vendors at the market price and that until now were able to return, logically the new price, and must wait 10 weeks to be readmitted. One of Wharton professors (Peter Cappelli), noted the fact, says the decision is saying "we made a mistake in paying more than the salary he played them to me and thus remove the top" and described as " The most cynical thing I've heard for some time ", because it promotes caparrada is transmitted to the market this good management to improve the result.
The logical and expected by the directors of Circuit City Stores would be an increase in share price, which for the last 52 weeks has been up to at least 31.54 dollars and 17.02 dollars in just the past month March. Even today, when I write, was around 18.6 dollars, ie a 9.28% increase. Given that the end of 2000 the price was $ 40 and $ 3 for late 2003, having reached 31.54 is pretty good and down to 17.02 could represent another replay low cycle, so 9.28% of the increase can symbolize the breaking of the trend. However, achieving this result justifies a decision in a few days as they have taken?
As Professor Cappelli, analysts of the stock market is like for restructuring immediately improve the outcome and therefore the companies act consistently. However, a reduction of staff is always indicative that the company has made the problems of excess capacity or alternatively, excessive complexity. In the present case, the Circuit City Stores, apparently is not either give reasons and, by doing so, all you get is to reduce muscle when required. A reduction of muscle that has an added risk as the loss of capacity. Employees who earn more are probably the oldest, those with more knowledge and experience with the products and dealing with the public (remember we are talking about television, games, PCs, video, photography, ...). In such cases, there is a decapitalization of the company.
As the article points out, in restructuring, there are two variables to consider: a) as it is for people who come out, and b) how it treats those who are left. And the first is quite influential in the second because of the leadership behaviors that appear to reflect on their moral values, moral values and demonstrate daily in those who remain and influence the state of mind, given that these are present which can be as follows.
Dear friend, redundancies, staff cuts, restructuring, elimination of jobs, outsourcing, or ... continue having, the individual effects are severe and affect the health of people, depending on the mental and physical strength of each, if they be because there are objective reasons there are, but do it so that shareholders and socially responsible, on behalf of those who take these decisions, are also demanding that those with poor manage and implement them the same syrup.
Joseph Albet
