Forum Overview :: Gamerasutra :: Game Companies aren't the only ones cutting staff after large profits

[quote name="Commander Tansin A. Darcos"]In <a href="http://www.law.com/jsp/lawtechnologynews/PubArticleLTN.jsp?id=1202625598174&kw=Thomson%20Reuters%20Announces%203%2C000%20Layoffs&et=editorial&bu=Law%20Technology%20News&cn=20131030&src=EMC-Email&pt=Daily%20Alert">this article</a> it mentions that Thompson Reuters reported stronger-than-expected financial results for the third quarter of 2013, but it's going to spend about $350 million in severance and other costs to lay off about 5% of its workforce, or about 3,500 people in its risk and finance divisions because those are weak performing sectors of the company. What I find interesting is too many companies, when they have what they deem to be "surplus" people, are, instead of looking at new potential markets and products and services they could be offering, and using those people to develop those new products and services, immediately go for the fast buck by layoffs and staff cuts. I notice it's always the "little" people who get cut, the people who make around $20-$50,000 who are given severance packages or just simply dumped <i>en masse,</i> but it's <s>almost</s> never the executives with multi-million dollar compensation packages that these companies try to reduce. This goes right along with companies that have decided that if you've been out of work for six months they will not hire you, and they won't hire people who have credit problems because they had large medical bills. Which really makes a lot of sense, don't hire someone who has no job because that allows them to get out of their problem and gives them the ability to do productive work, and don't hire someone who was out of work and has credit problems because they couldn't pay their medical bills, hiring them might allow them to actually now have an income and pay their bills! Farmers have an expression for the exclusive focus on short-term income increases being done at the expense of long-term profitability and potential long-term growth: "eating the seed corn." If you don't save for investment and invest in the long term, eventually you'll have nothing. And do we wonder why people steal from cheap-jack employers like Walmart? (Not that that is a good idea either, because now you're having to spend more money on security and loss-prevention, plus if you start to get dishonest employees then the culture of dishonesty tarnishes the whole enterprise. The presence of rotten apples <i>does</i> spoil the whole bunch. Then the others either resent that they've been suckers by being honest and not getting their "fair share" of "honest graft," or they despise themselves for being dishonest. Or worse, they don't even care that they're dishonest and the corruption is so bad the company rots from the inside out. <i>Requiem en Pace, Enron</i>.) You compare a company like Walmart to a place like Costco, which pays better than average wages, has better treatment of employees, has discovered they have lower turnover, less employee theft and their profitability can often be equal to or greater than that of much larger competitors. You can't fake this stuff, when the company cares about its people, it shows, and people respond when they see that their employer does care. The <i>Hawthorne Experiments</i> conducted by Western Electric back in the 1920s confirmed this. Management concern for employees increases employee efficiency and makes them better workers. Ford Motor Company decided to try something. It used to be that the emergency stop button for the assembly line for cars was placed about every 20 stations, and woe to you if you shut down the line for anything short of someone about to lose their arm or get beheaded. So Ford did something unheard of. <i>They put the stop and start button at every workstation!</i> And the employees use them! Hundreds of times a day, workers stop and start the line, and what is it for, usually for a second or two, maybe 3 or 4 seconds, because they need just a tiny amount of extra time to tighten a bolt or to get a piece inserted correctly. The company "loses" about 5 minutes of production time a day. But the quality of the product went up dramatically and worker complaints and grievances dropped. I wish companies like Walmart would stop lying in their advertisements and trying to make themselves look like they care about employees. Their practices put paid to these claims. They're interested in just two things, how much in short-term revenue increases they can generate and how they can get away with paying people as little as possible, up to and including breaking the law to do it by hiding what they're up to or intentionally underpaying people in any way they can, legal or otherwise. Plus their employees are starting to realize the employer doesn't care about them at all and if it could run the place with 100% automation and unceremoniously jettison every employee, they would. I read requests for bids from various public agencies because the stuff they're looking for tells me what buyers actually want in software packages, not what I think they want but the features they need to do what they need to do, or to convert what are excessively manual-based systems over to computerized ones. This allows them to get more done and allows them to scale up operations. When a bus company can implement a voice-activated or touch-tone controlled system for schedule information, this doesn't mean they cut all the information operators, it means they can have them do other things, and chances are, now, if you need a live operator you can get one in less than a minute instead of sitting on hold for 20 minutes waiting for an operator to get free. And often the automated system gives you faster results for routine queries. Discovering what potential customers really want means you have the capacity to solve their needs, and when you can do that, you can make a lot of money. But you have to have good, motivated people to implement these solutions. And in some cases the ideas can come out of the strangest places. An undertaker by the name of Strowger was unhappy because he felt that his business was suffering because when people called the operator asking for his mortuary that the operators might be taking bribes to divert his calls to other funeral homes. So Strowger, who had no experience in telephony, sat down and figured out how to build an automated switch that allowed people to dial their own phone calls directly. Strowger's invention came at just the right time, because in the early 1930s, phone companies were having problems scaling up as more customers were making more phone calls and it was getting harder to hire more and more operators, eventually you'd have to hire almost everyone to handle the call volumes. And in a way, that's what they did. Now, we all make our calls self-service by dialing them ourselves, we get better performance (because we can have things like memory dialing where you can program the number into the phone) and the results are faster. With automatic dialing it's made phone service much cheaper since they have lower labor costs. And those people that don't have to be phone operators are doing other things. Possibly providing new products and services that are more valuable. Strowger was a special case of someone not in the industry inventing something desperately needed at just the right time; one of the biggest wins at 3M was the guy who invented Post-it notes. But the excessive focus on short-term profitability at the expense of long-term growth means we'll never know what could have been. We'll never see the new software applications that weren't developed and we'll never know about what doesn't exist. The large amounts of money made long term from new revenue streams and new development will never appear when we don't think long term, but only go for short-term increases in profitability and what are essentially quick-buck schemes. [/quote]