Thursday, February 21, 2013

The Downside of Downsizing

You can’t seem to miss these days the front-page stories about Hewlett-Packard and Best Buy slashing thousands of jobs with talk of downsizing in order to remain competitive. You know, you just don’t see national front-page stories about companies hiring people by the thousands. Oh, sometimes in the business section there will be stories about manufacturing plant openings or corporations moving headquarters that talk about job additions but certainly not on the scale of the layoffs and they’re usually regulated to local or regional news outlets, not lead stories in the New York Times or the CBS Evening News with Dan Rath…I mean Bob Shief…ah…Katie…Scott Pelly.

It seems that corporations need to figure out the basic principles of business survival and if they gradually add jobs as their company grows that the same has to happen in reverse if they want to remain stable and vital. I’m sure many companies do this and we just don’t hear about it. They realize that boom and busts do occur and are cyclical.  It is their job to forecast the future and to have plans in place to reduce a work force slowly in order to keep their company from falling by the wayside. To see how not to do it, take a look at what Ford and GM went through a few years ago. The problem is that you don’t hear about the “smart” companies as they prosper no matter how the economy or markets fluctuate.

It seems like it’s almost a crime for these corporations to do what they end up doing and in some circumstances they have indeed broken the law. In my opinion these so-called business leaders are not only not leading but have cocooned themselves in these little Teflon societies where they feel as though they are immune to the ills of the rest of the country or the world. Most of them eventually get caught with their pants down, such as Ex-Tyco CEO Dennis Kozlowski and the Enron boys, but only after dismantling not only once valid and worthwhile companies, but also the lives of thousands of Americans who do not have a nest egg to live off of while trying to put the pieces of shattered lives back together.

I believe the American entrepreneurial spirit is what made our country great but I also believe that smart management is also needed for a stable economy that leads to a happy existence for all. I think our universities have been churning out too many business executives who have never gotten their hands dirty and have only learned about dealing with people, both employees and customers, from textbooks and university professors. There are far and few “working from the mail room up to the board room” stories anymore and it’s a shame because when you are just one of the guys or gals punching a clock and then happen to move on up where you’re in a position of power, you realize how the decisions you make can affect the lives of so many. It’s a huge responsibility and I don’t believe that the top executives of today’s largest corporations understand or even care about this issue. All they see are spreadsheets and all they hear is the voices of major stockholders.

If only it was a requirement for every CEO of every Fortune 500 company to be stripped of their executive privileges and access to their personal wealth and have to survive on their own, working an hourly job for six months. Perhaps it could be the next big reality show, The Real World: Wall Street or we could put the top fifteen executives in a sealed off house and watch how they battle each other for domination. Now that’s entertainment.

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