By using this site, you agree to our Privacy Policy and our Terms of Use. Close
richardhutnik on 02 August 2011
Edit Thread
HappySqurriel said:
richardhutnik said:
HappySqurriel said:
If you're a business in the United States and you constantly hear the rhetoric of increasing business taxes, increasing regulation and introducing cap-n-trade and you are already uncertain about how your company will handle Obamacare and other regulations and emerging business conditions the last thing you're going to do is hire employees unless you're in desperate need for them.

When a business utilizes employees that are salaried, at what point and time will they ever hire new people unless they see themselves in depserate need for them?  See this current situation regarding the bank.  They are making money.  Profits aren't an issue.  They feel there isn't a need for as many employees, despite making a profit, so they let them go, rather than figure out better ways to redeploy them.  Do you think if a business could make a profit without hiring additional employees, they don't do that?

Companies will rarely downsize when they're turning a profit unless they believe the only way to increase profit is to reduce expenses ... because, even if they believe that an individual is not providing a benefit to the company, companies tend to favour growth in revenues to increase profits which (almost always) requires growth in the number of employees.

With a bank, it is entirely likely that they're reducing overhead to build up capital reserves to survive a market shock they're anticipating.

That was the old times they did that.  As it is now, IBM regular downsizes (or they like to say "right size") by regularly cutting head count, and hiring other people.  Also you say G.E, under Jack Welsh, made a point to always fire at least 10% of the work force every year.  To make even more profits, they would cut employee headcount, and do consolidation.  No matter if the time was good or bad, they were always "triming the fat".  I remember the mantra back in the day also with Tom Peters speaking of how a department went from 40 people to 3 in a large company and didn't lose anything.

If a company believes it will get increased revenues through reengineering, it does that, and lets people go.  This is the new norm.  I understand what you are saying as historically accurate, but the trendy thing now is to downsize in good times or bad, just as was seen with the bank.