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Why layoffs are for lazy corporate overseers (sign of failure to properly manage a business)
Fortune ^ | 03/05/2013 | Eleanor Bloxham, CEO of The Value Alliance

Posted on 03/05/2013 1:52:42 PM PST by SeekAndFind

Layoffs are often a sign of failure by top executives to properly manage a business and forecast needs -- and failure of board members to ensure that the right management is in place.

Probably every worker today has experienced -- or known someone who has experienced -- at least one layoff. Layoffs are an abomination -- for the pain they cause innocent victims -- and the lack of accountability they often represent.

Before the great recession, in 2006, Lou Uchitelle sent out a warning about the terrible costs of layoffs in his book The Disposable American: Layoffs and their Consequences. The book traces the history of job security -- and layoffs -- in the U.S. and explores the psychic trauma created by corporations' overuse of this so-called right-sizing tool.

Soon after his book came out, Uchitelle explained to me that he "made a presentation at a meeting of the American Psychoanalytic Association, and at the end, there was a vote taken among more than 30 psychoanalysts. They were asked, 'Do you, from your experience, consider a layoff a traumatic experience?' And all of them put their hands up."

Many workers today don't know of a world without layoffs. But they haven't always been common. I was in New York attending a disaster recovery conference in 1992 when IBM (IBM) announced its very first layoff. I remember the shock among the IBMers attending that conference. The Big Blue rug had been pulled out from under them, and they told me they would never feel the same way about IBM again.

Twenty years later, the Bureau of Labor Statistics reports that in 2012 alone there were over 17,000 U.S. mass layoff events. (The Bureau defines mass layoff events as 50 employees or more laid off at a single employer.)

(Excerpt) Read more at ...

TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: layoffs
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To: Sequoyah101

The problem is the incestuous relationships across different Boards.....Executive compensation is rubber stamped. Profits are privatized, while losses are socialized, and those who make bad decisions don’t suffer the consequences. For a market economy to work, good decisions must be rewarded, and bad decisions must be punished.

21 posted on 03/05/2013 3:01:06 PM PST by dfwgator
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To: Sequoyah101

Your comments prove you’ve never been an entrepreneur and don’t even understand the premise. You’ve never been in management either, and like most who have not, think it’s easy. And you haven’t mentioned a single word about how government bureaucrats make running a business impossible. You really belong on DU or Huffpo......or CNN.....

22 posted on 03/05/2013 3:03:57 PM PST by C. Edmund Wright
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To: dfwgator

....which means government must get the hell out of the way....and we’re a LOOOONG way from that status at the moment....

23 posted on 03/05/2013 3:04:49 PM PST by C. Edmund Wright
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To: dfwgator

Ever sat on a compensation committee or read the compensation committee report in the 10Q?

You are right, they take care of each other... for the most part, a lot.

24 posted on 03/05/2013 3:17:29 PM PST by Sequoyah101
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To: C. Edmund Wright

You’re wrong on all counts and I don’t have any more time for you.

I don’t lay people off I give them an opportunity to be happier and apply their talents somewhere else. Kinda like fired only realizes we both may have made a mistake. Me for hiring and the employee for failing.

25 posted on 03/05/2013 3:21:12 PM PST by Sequoyah101
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To: Sequoyah101

Now you’re not making any “fire” people but you don’t “lay them off” - which is fine....but not necessarily any difference between the two, especially in certain states where certain businesses must use certain terms to help them navigate the law. Seriously, you are being postus schizus phrenius here....

26 posted on 03/05/2013 3:29:43 PM PST by C. Edmund Wright
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To: C. Edmund Wright
I attribute the massive large-company layoffs of the early 90’s to the 1988 ERISA ruling changing company pension vesting rights from 10 years to 5 years.
27 posted on 03/05/2013 3:53:28 PM PST by OftheOhio (never could dance but always could kata - Romeo company)
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To: SeekAndFind

28 posted on 03/05/2013 3:58:45 PM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
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To: discostu

“...that in a normal state would have been fired months ago.”

I got laid off from a large company years ago when things got slow. Two years later they asked me back. Then several times afterwards. They also did not like to purchase equipment (they rented it). With people you can lay them off, but millions of dollars worth of gear sitting on a shelf is a problem when things get slow.

I can understand their thinking, but it is short-sighted I think. I used to work for a small company before that and he never did lay anyone off - although there were some tough years for him. But he always made payroll.

29 posted on 03/05/2013 4:07:04 PM PST by 21twelve ("We've got the guns, and we got the numbers" adapted and revised from Jim M.)
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To: rudabaga

“Eventually when other people are willing to work for less they get the work and the company moves.”
Depends on the workers. Workers should learn to make themselves valuable. I’ve long thought that American workers can recapture market share if they innovated and learned to create greater value for their labor. A good marketing campaign to consumers could work (like ‘look for the union label’ but, hey, the union bit the hand that fed them). But that would require some kind of investment and effort, both lacking in today’s collective.
Folks need to consider the fundamentals in our economy.
Globalization - deal with it, it’s here to stay.
Techonology - Even FoxConn workers are being replaced with robots.
Demographics- An aging population with less needs and wants.
Learned dependence or Earned success. Chose

30 posted on 03/05/2013 4:13:07 PM PST by griswold3 (Big Government does not tolerate rivals.)
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To: Secret Agent Man

Ah, trial balloon.
Perhaps, to further obama’s corporatism. The day after his first inauguration, he said we would have a ‘government guided invisible hand’. That’s when we went ‘slow roll’.

31 posted on 03/05/2013 4:19:37 PM PST by griswold3 (Big Government does not tolerate rivals.)
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To: SeekAndFind

How can this woman be a consultant? She doesn’t even understand one of the most basic tools of management....SWOT. She evidently has forgotten that there are other players besides management and employees. That said, most American management fails to use SWOT, which shows how poor management is in this country.

32 posted on 03/05/2013 4:25:26 PM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: C. Edmund Wright

I have worked for a company (in WA) that uses lay-offs to clear the chaff, but I was also laid off by them as a very new employee once upon a time (and later brought back). I have seen many people who were laid off who well deserved it and some who should have been (and innocents- like I was- like when the cuts go deep.) However, the actions of (all friends with each other) boards and quick lay-offs to increase cash flow is short-sighted.

33 posted on 03/05/2013 4:28:25 PM PST by conservative cat
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To: Sequoyah101
FINALLY, someone recognized that layoffs are a failure by management.

Yeah, "FINALLY" some left-wing, business-hating writer admitted it. What an event!

The question I have is why you admire that.

Now, I suppose the argument could be made that management has made a mistake by trying to sell an unprofitable product -- resulting in the need to cut expenses. But should management compound its mistake by failing to cut expenses [labor included] to regain profitability?

And so what if they off-shore? Business ain't charity. If our government can't resist the urge to tax and regulate business out of business, then where's the moral necessity for us to labor on as patriotic slaves?

34 posted on 03/05/2013 4:31:20 PM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment. -Ludwig von Mises)
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To: rollo tomasi

Office Space is still the most accurate documentary film ever made about what life is really like in Corporate America. :)

35 posted on 03/05/2013 4:37:50 PM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: griswold3

The irony in that is that IBM was the origin (or an adherent to) the idea that happy employees are productive - and in turn was able to be profitable for a long while. The business and the people working for them would recognize each other as equals - working towards a more profitable company. Now, you see an adversarial attitude develop along with the beginnings of a European labor system - where people have long since lost a strong work ethic or the desire to work for the long term.

On globalization:
How about making it work for more than just the ambiguously defined consumer? Pushing everything onto the worker while expecting (little to) nothing out of the other party will result in mismatches. When both parties work together as equals, requirements are made clearer with less mismatches.

With the transition away from manufacturing, there was a clear and long term path away that would lead to more certain prosperity. Such clarity must return if you want people to improve themselves in the way that you wish. Otherwise it will be seen as having too much cost for too little benefit (where MB is less than MC).

On technology:
It is the most humane alternative to offshoring. That, and you dont have the Foxconn complaints crop up as much or as loudly.

36 posted on 03/05/2013 5:25:58 PM PST by setha (It is past time for the United States to take back what the world took away.)
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To: conservative cat

you might want to change the word in front of “cat” on your screen name....

37 posted on 03/05/2013 5:28:11 PM PST by C. Edmund Wright
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To: SeekAndFind

Pathetic responses. No arguments refuting anything said in the article, only accusations of stalinism and similar crimes against humanity. And the old cliche that the article and anyone reading it belongs at DU.

I must say that it is the first article in the business press that I’ve seen, that attempts to examine the phenomena of layoffs, which as it notes did not exist on such a mass scale 30 years ago. I’ve seen so many of them, so many done perfidiously, age discrimination, ethnic discrimination (no Hindus laid off), position discrimination (staff members laid off, no managers, managers left with no underlings), and layoff sizes small enough so that neither the SEC, nor the Wall Street has to be notified.

But anyone seeing the dark side of the issue is a Communist, right?

38 posted on 03/05/2013 6:08:03 PM PST by Revolting cat! (Bad things are wrong! Ice cream is delicious!)
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To: SeekAndFind
Consulting firms seized the moment and devised practices to teach companies how to eliminate staff. But the recommendations of the consulting firms are not agnostic. They rarely, if ever, recommend cutting the heads of those who hired them.

Heh heh. That is a great point that the writer makes. I don't care what the writer's political affiliation is - that is a great point that she makes.

39 posted on 03/05/2013 9:00:07 PM PST by grundle
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To: Revolting cat!

The question is if you’re willing to consider government’s contribution to any harm and to have them step out of the way.

40 posted on 03/05/2013 9:59:33 PM PST by setha (It is past time for the United States to take back what the world took away.)
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