When companies cut costs, who wins?

I was thinking the other day about companies looking to cut costs - mostly by getting rid of people or "reorganizing" a pension fund, etc. -- and I wondered who really wins? If the company is public, do the stockholders win (they are ones that actually own the company) by laying off thousands of people? Do customers win? Does the company's executive team win? and who is better off, those that get laid off, or those that get the "privilege" of keeping their jobs. My contention is that no on wins.

When a company begins to look for ways to cut costs instead of looking for ways to increase revenue - they are saying "we can't get more revenue, this turnip is bled dry". That should signal something to customers, employees and/or stockholders -- when costs are out of control, don't blame the workers, blame the management for allowing themselves to get into this position. You should look no further than the CEO (and probably the Board) along with his direct reports - they are to blame. Add up their salary and benefits - how many line workers would it take to equal that amount?

Most employees come to work, put in a full day, and believe the company respects them. The harsh reality is that most executives in large, megla-corporations really are doing more to look after their own "salary" and less after the welfare of the organization and it's employees. I've seen it and been involved in it.

Nothing is worse than seeing thousands of your co-workers walking out the front door with a box of personal belongings, wondering what they are going to do tomorrow. It hurts to know that your value to an organization is so small and insignificant. I bet all the good people at Enron, those that woke up in the morning and loved going to work, don't feel a lot of love for the executive team.

And as the telecom mergers start shaking out, I bet there will be a few former AT&T, BellSouth, SBC employees that wonder why they spent 20 years working for those companies, only to be shown the door. Cutting costs is a short term remedy for sometimes a long term problem. And as the thousands walk out the door, the people in the executive suite get handed bonus checks for making the "books" look better and the stock price go up.

Congrats on a job well done. (BTW, that was sarcasm)


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