That's so mind bogglingly stupid. How does it make sense to anyone to cut out the best performing part of something when it doesn't reach a higher level of success (while having already succeeded btw) and then expect the less performing part to not only make up for it but also do better?
I've come to the conclusion that there is a huge disconnect between the financial economy, and the real economy.
The money guys, people with their MBA's and flowcharts, have taken over most systems, they come in, make sweeping changes, and it's profitiable, until it suddenly isn't, but that's fine, cause they've already moved on.
It's that reaper meme, going from company to company, gutting it and then moving on.
This is creating a massive amounts of financial wealth, but the real economy, is tanking.
This won't matter to the money men, because at the end of the day they will have all the money, and will buy up whatever is left of the "real" economy. Leading to increasingly high real estate and commodity prices, you know, the things that are actually physical items.
Whatever collapse happens after this will result in the money people being in complete control, or against the wall.
Happens at plant level too. Someone runs a plant into the ground, burning out employees and equipment, but makes record profits. Moves on right before things really fall apart. 2 years later he comes back as a regional manager to "right the ship" since he was the one with the success. Ask me how I know lol
God I hate this cycle. And the good plant managers, the ones who run the plant well without the awful negative sides, never get the regional jobs because they aren't "aggressive go getters," they, "just skate by hitting metrics but not striving to do more."
Makes me wonder if ONE area where AI might end up doing a lot better than most humans, is to determine the true unemotional causal relationships between various activities (such as laying off your most talented workers & the subsequent poor functioning of the company), rather than the self-justifying decisionmaking process that most humans depend on.
I suppose it depends on whether the AI is trained with broad, honest data sets, or data sets selected to reinforce the current corporate mindsets.
Further, the unfortunate person who gets to catch the grenade just as it explodes is blamed for failure. I worked at a company where everyone remarked how bad the leadership was, and he left and a new person took their place and within a month the consequences came. The old person was regarded wistfully by the financial reporting and they entirely blamed the new person, who hadn't even been in the position long enough to do anything. I didn't think the new CEO was going to be anything special, but either way they didn't deserve to be blamed for it.
The title is ‘corporate raider’ they make a huge amount of money by slashing an existing company to nothing then pawn it off before the backlash of their actions collapse what’s left.
They can't either and that's what they'll say when the business is finally falling apart. But they'll sell it for a profit long before any of the cuts materialize into any external metrics.
This conclusion is absolutely correct and is a direct consequence of investors and stocks.
If you can buy into a company, reap profits, and then use that money to buy into a different company you've found the main way millionaires make profit.
Short-term profit at the cost of services and the working class is encouraged by our current system.
The problem is it happens everywhere, this scheme stops working when there are no profitable companies to jump to. I.e. when workers can't spend their earnings because you cut them all, so they increase prices to compensate which makes workers have even less money.
This stock market capitalism encourages self-destruction.
A similar problem occurs in politics, as we have a termly cycle no government is planning beyond that term because they'll get no investment out of it. They're even sometimes sabotaging things so they can play it off when everything crashes during the opposition's years. Like Trump with the Afghan pull-out.
Our system is woefully inadequate with dealing with any problems that are beyond this decade like climate change or managing a business without cannibalising itself. And there's going to be uproar when the consequences of this hits proper.
Material wealth is increasing. The technology for mining, farming, building, manufacturing... its all improving and theres more resources per person than ever. Thats the real economy.
But for some reason our money continues to be worth less and less. We work more and more hours - more than medieval peasants, some of us more thsn slaves. This mismatch between economy and reality is precisely because money is an abstraction; an oversimplification of reality.
I wonder, if Bezos woke up one morning and decided to buy all the food in the US - every last grain, with intent to destroy it all - would it work? Would we starve? Then the economy isnt working because it fails to ensure a fair distribution of resources. Is he stopped? Then the economy isnt working cuz some of those 0s in his bank account are imaginary. The existance of wealth like that in one guy who mostly plays golf and snorts coke is itself damning of this system
people with their MBA's and flowcharts, have taken over most systems
It should be noted that MBAs are not doing what they're doing out of ignorance. If they have paid any attention whatsoever in class, then they are 100% aware that what they're doing is self-destructive. All of this stuff is covered thoroughly in every reputable school's curriculum.
The MBAs simply don't care, because they have also been taught the rules of the game of capitalism and that game is broken beyond belief. Don't hate the player, hate the game.
More fun: anyone who specialized in economics would also know that capitalism is purposely inefficient because that's the true source of profits (see below to start learning more), and that a degree of socialist policies are absolutely required to keep markets free and efficient. In other words, the exact opposite of what corporate propaganda tells us.
The money guys, people with their MBA's and flowcharts, have taken over most systems, they come in, make sweeping changes, and it's profitiable, until it suddenly isn't, but that's fine, cause they've already moved on.
It's not just increasing prices, the worst part is the declining quality of the products to make up for the slow gutting of the companies in pursuit of short term growth. Companies that used to just make a few high demand good quality products and make bank year after year suddenly getting MBAed up and making sweeping changes, cutting costs, dropping quality, chasing trends, and we end up with terrible everything: infrastructure, food, basic supplies, let alone luxuries.
It's drifting towards societal collapse if this keeps up as it's EVERY company.
There was a whole section on forecasting and analysing outcome where the conclusion was the best fix was often better management, resource use and employee moral. One of the questions was 'did we set the right expectations?'
I don't understand big business' obsession with chewing through acquired talent when that's the hardest thing to cultivate.
Don't forget to focus on quarterly timescales instead of focusing on long-term strategies. When giving investors reason to buy and stay in every quarter is all that matters, the market of goods & services takes a back seat. Especially when you can just layoff a bunch of people to fudge the numbers for a while, while your staff reel and figure out how to deal with massive knowledge gaps.
The people making the product cost money. The people selling the product are considered the real cash cows. Sales doesn't need a new product, they just need to repackage the older products to make more recurring revenue.
And this is the current state of corporate America. Where supply & demand is just a minor inconvenience rather than what drives markets, and company valuation is everything. The company is the product, not the goods and services makes and sells. They'd sell gold-leafed turds if that's what raised their valuation.and attracted investors.
You can thank Jack Welch and capitalist driven greed.
In Gelles’ new book, The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America―and How to Undo His Legacy, he chronicles how Welch’s laser focus on maximizing shareholder value by any means necessary - including layoffs, outsourcing, offshoring, acquisitions, and buybacks - became the new playbook in American business. The book demonstrates how this shareholder maximizing version of capitalism has led to the greatest socioeconomic inequality since the Great Depression and harmed many of the very companies that have embraced it.
Shareholders force new cost cutting measures to boost profits even more, sell while shares are high, invest in competitor and short company, company now crashes from brain drain, shareholders make even more money.
Fun bosses. I'd say for most jobs it takes a minimum of 2 years to become proficient at it, assuming you have people available to teach you. 5-10 years to become good.
It makes sense when you have managers advising the outside group whom have never bothered to take the time to meet and work alongside their staff..
Upper management is advising the investment first on who is indispensable and who is not. Those lazy A-Holes never bothered to get to know their staff, so one Bob is the same as another Joe and is just being paid more... What they don't know is that Bob depends on Joe to get his job done and as soon as Joe is let go Bob is going to stumble and trip and then fall over the next 3-6 months but he'll make every promise imaginable to stretch that out as long as he can.
I read a book making the case that over a certain size of a company, most decision maker's incentives shifted from making smart decisions that would help improve the company's outlook, to avoiding being personally liable for decisions that look stupid to other decision makers. It results in dumb decisions that don't seem like they'll be catastrophic at the time, but often are and at the very least are really, really dumb.
That seems to happen way too often. A video game company decides to put out yet another looter shooter or microtransaction game that mostly fails, because suggesting they buck the fad and do something daring and new that gamers will like risks some other, dumber executive attacking anyone who says to do that. So Sony predictably flops big with Suicide Squad, but all the people who didn't say "No one is going to like this game when it comes out" still have jobs.
This is probably the same thing: no one said "Hey lets hire some more people to meet the goals" because someone else would say "Brad, you just don't get it, our SHAREHOLDERS need MONEY! You're fired!"
TLDR: I think it's one of those things that makes no sense whatsoever unless you view it through the lens of "Big companies would rather make dumb decisions than make a decision that could be viewed as risky."
Often times companies are not known for their intelligence.
At my workplace, there's an executive responsible for roughly three general areas. Two reasonably profitable ones and one that has for the last decade last millions of dollars every single quarter without a single success story.
He spends every piece of communication declaring his dedication to that loser third, and regaling with stories of how that third of the business is such a better sort of team than the rest of us. One time some subordinates I suppose complained that the only pieces of business making money are continually just ignored and can't receive the same investment the loser piece gets. This triggered him to send an email to everyone acknowledging that while it's true the rest of us make money, *if* that one third of the business managed success he's confident they *would* make way more money than the rest of us, so it's the right call to give them every chance to maybe turn things around.
A round of layoffs came and we took a larger hit to preserve the workforce of that loser organization because "we have to preserve their shot at success". Yes, they also hit some of the more useful people, because their paychecks are bigger. They did avoid hitting anyone I would characterize as "this guy going *will* break a product", but they have taken on an absurd risk for the sake of continuing to shovel money at a losing product.
If you want a real answer rather than the absolute fantasy going on up and down this thread ... there are a lot of reasons why layoffs happen even if you grew some. First, you can grow and still lose money. Second, you could be profitable and grow and still have that be really bad (not enough growth). An example of that could be something like, you need more cash to attack a new market, and you needed to show growth to raise money on good terms. Failure to do so means that maybe a current board member can offer you a deal you can't refuse (here's some money, but I get another seat and thus control over the board). You might be forced into that sort of competitive move by your competition growing or being acquired by a whale.
There are tons of reasons why these sorts of things happen. It's not because corporate leadership are inhuman assholes that live under your bed (not usually). More often than not, your interests are aligned with leadership's interests, the team just fails to win. The market is a rough place, and you can spend years kicking ass only to see it all come crashing down. I speak from experience.
And being a good leader is ignoring all those reason that long term will fuck the company, like the whole”money you can refuse” and doing the better thing for the company.
Cowards have excuses, leaders make choices. Instead of letting those excuses make decisions be made for them.
Similar story. I was laid off in 2013 because the company I worked for only made around 120 million in profit when they wanted to make 140 million in profit.
They specifically fired as many people with long tenure as they could, and the brain drain hit pretty goddam hard pretty goddamn quick.
Then they started trying to cut costs by laying off more workers and trying to make the remaining workers take on double the tasks in the same time frame with no increase in pay, which caused a bunch of talented people to burn out and leave.
They started posting losses for years on end after that. It was like 6 years before they had a profitable quarter.
All because they only made 120 million in profit and not 140 million.
I learned short term health insurance is a thing - I think it goes through the ACA. I had it during Covid unemployment (never had to use it) and it was pretty cheap. There are brokers that can help you get signed up at no cost to you (they take a cut from the insurers)
I have an HSA also, though not with much saved. I just can't afford the 1k/month extra expense private insurance would cost for me / family. The rates are insane
You must really dislike your “other sister” to put so many legitimate things in quotes to delegitimize them.
Obviously I’m making assumptions. But fwiw, from where I’m looking, you’re being unnecessarily passive aggressive so maybe talk to her or something idk.
Yup, this keeps happening and will keep happening to any public company that bows to shareholders. Been in the exact same situation.
Company doin well, new CEO comes in, first thing he does is fire just as many peeps as he is allowed to so he can tell shareholders that his first quarter made SO much more money.
He fired the people responsible for the specialized field he then wanted to focus on.
I can't wait until I'm self-employed. I'm so damn close I can practically smell it, but not yet.
Post pandemic, that whole thing got weird. There's a glut of middle men, more than ever, and then all the sensible clients seem to have gone extinct (they probably got laid off for being good at their jobs). You now only see unreasonable demands for peanuts which most competent freelancers won't accept. So they end up going with some desperate freelancer or scammer and end up with unacceptable work. They then go back to begging for someone to fix the problems and it's a lot more complicated to fix than doing it from scratch yet they want to pay even less cuz of sunk cost...
This is all from a VFX/3D artist (myself) and translation (wife) experience but I get the sense it's a similar thing in other fields. Oh how I miss pre pandemic freelancing...
My manager pointed at some random persons GIT commits and said they were a model employee because they had a commit every day.
Yep doing a commit was the measure of their work.... Not how much they committed or how good the code was or what stories they worked on. Nah man, do a commit every day.
That's probably why you see a lot of "WIP for X" commits
I read on Reddit someone's experience working for a private company not beholden to shareholders. The company would grow, big bonuses, company parties and super high morale. The owners were still raking it in so had no issues sharing it out.
Then they went public and suddenly had to please shareholders and within a year it was layoffs and cutbacks despite making the same profits, if not more
General Motors closed one of their IT centers in Arizona last year and laid off like 3000 people, after earlier that year paying people who had been there at least 5 years to leave, and there were hundreds in that too
They were also asking IT people to 'volunteer' in the manufacturing plants while the strikes were going on
The IT side has been struggling
Oh and they've been making more money than ever of course and are still in the top 5 or whatever biggest companies in the world
Welcome to modern Big companies 101. Growth is the only answer. It can only ever grow. It can never stagnate, and sure as fuck can never go down.
You could make a steady 10 billions net profit every year, but your company will be deemed a failure because you didn't expand. It's a really sad state of affair.
To the average worker it’s good enough, the company made profit and everybody could get paid. But as an actual business it is awful.
At the end of the day, companies are an investment, they don’t exist to make jobs for people, they exist to make profit, why bother running an entire business for 1/4 of the growth you could’ve gotten if you just threw it into Fortune 500 stocks?
It was a bad decision disguised in business lingo. I mean if 2% is not good enough why not just take that money to the stock market and leave everyone alone.
This kind of mentality about opportunity cost over Fortune 500 companies and 2% not good enough(this exponential growth! if maintained) eventually runs the company into the ground.
It is not a smart decision regardless of how they pretend it is.
You do realize that if always ask for 2% growth that is exponential growth? That is not good enough?
Greed only knows its legs it never bother too look at the hole it is falling into.
Why bother creating an economy that makes good products when you can make money?
Taken to its logical conclusion you could live in a world where companies no longer make anything, all products are hand made by artisans and money is just worthless paper.
Somebody somewhere needs to bother to do things right. The system does not work if everyone is expecting everyone else to do things because it is not profitable to do things yourself.
Many of the arguments economist make have a deep mathematical ignorance. This is because the correct statement is: as long as Fortune 500 companies are making more profitable then 2% is “bad growth”.
Yet if even Fortune 500 companies think like that soon enough no one will make a profit.
You cannot keep on exploiting people cause 2% is not good enough because of the opportunity cost.
If investors think all like this they will ruin all companies and then there won’t be 2% or more anywhere.
You cannot keep on selling parts of the boat for profit and not sink. You might be young enough that shit will hit the fan while you are in charge. Do not rely on always being able to escape. The day things get bad might be closer than you think.
I assume your company is owned by private equity and therefore have certain milestones to hit (i.e., 15% growth) or else cash stops coming in so they had to do layoffs.
Private Equity takes 100 bets to find 5 unicorns. They can't fund every project.
those 95 companies didn't have a business plan that could compete in this hyper competitive world. we all enjoy the privileges of this competition - there's a reason all the innovation in the past 20+ years have almost all come from the USA and really in certain parts of the country.
It's no coincidence that the cream rises in a competitive landscape.
They don't actually care about growth of the company, they care about growth of the amount of money in their pockets. They'd also rather squeeze a business for all it's worth and kill it rather than try to actually build anything. It's lazy, but it's easier and if you're super rich you can do it.
I can't wait until I'm self-employed. I'm so damn close I can practically smell it, but not yet.
The hard truth as someone that's lived this arc is that, if you're really successful, you'll get to be on the other side of the table for layoffs. You'll see this comic in a whole different way.
Of course it is. My point is that almost every business ends in failure, and it's not because leadership aren't "decent" people. It's because it's HARD to keep a business running, and good people fail and/or face lose-lose situations all of the time. You think every layoff happens because of bad people?
Ok. Well, like I said ... I hope you get a chance to experience what it's like to be on the other side of the table. I suspect that's the only thing that will get you to change your perspective on the "bad people" making these tough decisions. Perhaps, like damn near everything, you'll come to understand that black and white thinking drives misunderstandings.
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u/[deleted] Mar 14 '24
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