Article 43

 

Sunday, December 23, 2007

Layoff’s Bad Side X2

It is only when the people become ignorant and corrupt, when they degenerate into a populace, that they are incapable of exercising their sovereignty. Usurpation is then an easy attainment, and an usurper soon found. The people themselves become the willing instruments of their own debasement and ruin.
- James Monroe, First Inaugural Address, 1817

There’s a couple of things to keep in mind while reading the articles below.

1 - It’s becoming PAINFULLY OBVIOUS these days that executives in BUSINESS are as IMMORAL, corrupt and SHORT-SIGHTED as the politicians in their pockets.

2 - Corporations LAYING OFF THIER BEST PEOPLE under the cloak of REORGANIZATION to be more competitive may BACKFIRE for the business, end EVENTUALLY ALL OF US.

Circuit City’s stock has cratered since last March’s LAYOFFS, and their response has been to offer $1 million retention bonuses to executive VPs.

It’s NOT ABOUT keeping business healthy. It’s about PERSONAL GAIN for executives. 

ANY WAY they can do it.

---

Santa Claus Comes for Failed Business Executives

By Dean Baker
Prospect
December 23, 2007

The Washington Post had a good story on the dealings of the electronics retailer Circuit City. Unfortunately, it was buried in the business section where no one will see it. It should have been plastered at the top of the front page.

The basic story is that last March, the wise men who run Circuit City came up with the BRILLIANT IDEA of laying off their more senior salespeople, who get $14-$15 an hour, and replacing them with new hires who get around $9 an hour. It turns out that this move was not very good for business. One of the reasons that people go to a store like Circuit City, rather than buying things on the Internet, is that they want to be able to talk to a knowledgeable salesperson. Since Circuit City had laid off their knowledgeable salespeople, there was little reason to shop there.

Apparently Circuit City came to this same conclusion earlier this fall and tried to hire back some of the people it had dumped. In any case, things have not gone well for the bottom line. The company is now losing money and its share price is down more than 75 percent from its value earlier this year.

We all know what happens when you mess up in the dog eat dog world of big business—you get retention awards (that’s because your stock options aren’t worth anything). The Post reports that Circuit City’s executive vice-presidents will get retention awards of $1 million each. That’s 35 years worth of pay for one of sales clerks who earned $14 an hour. And that’s just the bonus.

This touching account of Santa Claus visiting Circuit City’s executive suites belonged on the front page of the Post and every other newspaper. What better way to get in the Christmas spirit?

SOURCE

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Posted by Elvis on 12/23/07 •
Section Dying America
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