Mass layoffs are a sin

Thanks for the feedback on the previous post. My guess is that once the situation gets to the point that Citigroup is at, planning to lay off 53,000 workers, then it's too late for any kind of union -- labor, shareholder or otherwise -- to make much difference.

The larger difficulty is probably that I'm looking for a shortcut to the kind of democratic management one might get from employee-ownership and that shortcut may not actually exist. Still, building alliances between shareholding employees and -- in Erl's phrase -- "pension groups, sympathetic union organizers and the Generally Chill" seems like it could be a positive step in the right direction.

Thanks also to Marc M. for pointing out the precedent of sokaiya -- a form of shareholder extortion practiced by the Yakuza. That's a bit beyond the kind of legal pressure I'm thinking of, but it is an interesting indication of the sort of effect a determined minority of shareholders can have.

***

If I were in the U.S. Senate, I could not approve a $25 billion aid package for the Big 3 automakers.

I might consider a $24 billion package, or even a $27 billion package, but trying to split $25 billion three ways is just asking for trouble.

Seriously, I wouldn't trust the heads of GM, Ford and Chrysler with a blank check -- I wouldn't trust those guys if they asked to borrow my leaf-blower -- but if this bailout/aid package is done properly, it wouldn't be a blank check. It would be more along the lines of "Here is the money and here is how you will spend it."

I agree with both of the points Josh Marshall makes here:

The auto industry -- directly and indirectly -- employs a ton of people. Even in ordinary times having that all gone down the tubes would mean a massive shock to the economy. If we can avoid having that happen now, why would we possibly let them happen in the face of what already promises to be a massive recession?

Second, on the question of the environment. There is no question that the internal combustion engine is at the heart of the climate crisis. But getting rid of Detroit won't get rid of cars. More to the point of creativity -- one of the things about crisis is that it opens opportunities would never exist in normal times. People have been looking for ways to get Detroit to get serious about developing cleaner, more fuel efficient cars for years. At this point, we're beyond that. We need to get serious about cars that don't use gas at all. If the whole domestic auto industry is all but asking to be taken into federal receivership, that tells me that the people running the federal government now have quite a lot of leverage.

* * *

On the subject of layoffs as a failure of management: It's possible to imagine a scenario in which mass layoffs are not the result of an equivalently massive failure on behalf of top management. But such scenarios are rare in the real world.

Likewise, it's possible to imagine a scenario in which mass layoffs are an absolute last resort and thus not a grievous sin being committed by top management. But such scenarios are also rare in the real world.

Yes, "sin."

You don't get to traumatize and place at risk 53,000 people and their families and then pretend it was just some kind of fluke natural occurence, like a hurricane or earthquake, and that you have no moral or ethical responsibility for the consequences of your decision. (See also one of my favorite economists, the late John Paul II, on "the scourge of unemployment," which he called "the opposite of a just and right situation.")

Comments

[mcc]

What I still don't get: GM, Ford and Chrysler are having trouble. So is Tesla Motors, but for a somewhat different reason. Why do only the first three seem certain to get a hefty federal bailout?

[Froborr]

One point on unemployment: There is a minimal level of unemployment necessary to keep the economy functioning. Below that level, the expense of replacing an incompetent employee becomes greater than the damage that employee does, and it is thus difficult to impossible to fire that employee.

Ideally, there's a small percentage of the working population unemployed or underemployed at any given time, but with enough job turnover that no individual person remains in that state for very long.

Point is, reducing unemployment below that level is inferior, as a cure for poverty, to constructing a social safety net adequate to ensure the basic right to freedom from privation for everyone, regardless of employment status.

[Mark Baker-Wright]

Topic: CEOs using private jets to attend meeting where they will beg for money.

Justified for security reasons, or a waste of money?

Discuss.

[hapax]

trying to split $25 billion three ways is just asking for trouble.

Says the man who became an actual authentic viral meme by splitting seven cookies among eight people...

[Karen]

Mark, clearly those executives don't spend any money on public relations.

[Reynard]

Posted by Mark Baker-Wright: Topic: CEOs using private jets to attend meeting where they will beg for money.

Justified for security reasons, or a waste of money?

Discuss.

Considering the number of people who probably want to hang these idiots morons assholes shitheads guys from the nearest tree at the moment, I'd say their concerns are quite justified.

[vince]

Why do people think that somehow forcing the car companies to develop "alternate fuel" vehicles would somehow be a good thing?

The problems those companies have aren't going to be solved by giving them a near-impossible task like that.

You might as well tell them to start building space-ships instead, or maybe to research perpetual motion. It'd still be a waste of money, but it would be more fun to see them try.

[Steve]

Fred: You've claimed that the CEO should be held accountable if there are mass layoffs...but that certainly shouldn't be the case in this instance should it?!?:
http://www.gazette.com/articles/focus_43586___article.html/lays_eliminationg.html

[Amos]

There is a minimal level of unemployment necessary to keep the economy functioning. Below that level, the expense of replacing an incompetent employee becomes greater than the damage that employee does, and it is thus difficult to impossible to fire that employee.

That is a myth created by capitalists to justify keeping the workers desperate. Competent employees should cost more than incompetent ones. If that cost is more than they are worth, then the competent worker is more valuable to the economy at their old job. That's how an actual free market economy would work.

[Ian]

Steve: I think that's the sort of case Fred would hit hardest. Gambling with someone's livelihood plus hypocrisy.

From wikipedia: Modern sōkaiya have developed other, similar methods to accomplish their goals. One example is the banzai sōkaiya, who disrupt business places with their cries of "Banzai!" and praise of the emperor until they are quietly paid to leave.

Anyone interrupting a GM shareholders meeting by proclaiming praise for Emperor Norton wins a Dada lifetime achievement award.

[animus]

I might consider a $24 billion package, or even a $27 billion package, but trying to split $25 billion three ways is just asking for trouble.

And then the bellhop pockets $2 billion . . .

[Dash]

As for the CEOs traveling in private jets (link from Mark Baker-Wright), Rep. Ackerman at least had the sense to ask, "couldn't you all have downgraded to first class or jet-pooled or something to get here? It would have at least sent a message that you do get it."

My sense is that the movement against the bailout is very largely directed at the CEOs. If they could simply kick the top level of management out (with no golden parachute), I'm guessing that many people would be much more willing to support the bailout.

It doesn't help that the Detroit bailout proposal comes right after the bank bailout PR fiasco.

[MikhailBorg]

Err... aren't several companies building and marketing alternative-fuel vehicles right at this very moment?

And well, aren't we and several other different countries and private concerns building spaceships as you read this? (I believe the Indians just got to the Moon with one...)

I'll give you the impossibility of the perpetual-motion machine, but I'm pretty sure that those other two examples are firmly in the realm of 'possible'.

[Cathy W]

Amos, when I had economics (in a class where extensive time was spent discussing the appropriate role of government in the market, and the answer was substantially more than 'none', so I wasn't being taught by free-market ideologues), there was a discussion of what they called "structural unemployment". The idea of zero unemployment making it hard to fire people never came up (this was econ, not business management...) - the premise here was that there will always be people who are between jobs, in a non-euphemistic sense.

Even in the best of times, in the most utopian worker's paradise, an individual company may falter and lay people off. Even in the best of times, in the most utopian worker's paradise, an individual person and their work environment may not be right for each other. In the best of times, in the most utopian worker's paradise, it may only take the unemployed worker a few days to find a new job - and the lower unemployment is, the more likely this is to be the case - but the time frame is not going to be 'zero'.

The consensus of professor and textbook was that in a theoretical economy, "structural unemployment" was somewhere around 4%. I had the class in 1989 - and I remember hearing about some very surprised economists when the unemployment rate went below this in the '90's.

[Jim]

There is a minimal level of unemployment necessary to keep the economy functioning. Below that level, the expense of replacing an incompetent employee becomes greater than the damage that employee does, and it is thus difficult to impossible to fire that employee.

That is a myth created by capitalists to justify keeping the workers desperate. Competent employees should cost more than incompetent ones. If that cost is more than they are worth, then the competent worker is more valuable to the economy at their old job. That's how an actual free market economy would work.

Then why does virtually every economics professor and textbook teach this "myth"? Don't answer; it's a trap!

-----------------------

In spite of the snark above, this isn't a question I can view with detachment. The company I work for bought one of our competitors about a year ago. Some of the products I work on are being merged with the competitor's products and I'm about to be "made redundant." To make a long story short, I'm going to be able to find another job, but will probably have to move away from my kids and thus see them less frequently. I view this as a cost, but it certainly wasn't included in any of the models they taught us in the economics classes I took at the university. Still, as Winston Churchill said about democracy, capitalism is the worst system, except for everything else that has been tried.

[phryno_74]

mcc: "Why do only the first three seem certain to get a hefty federal bailout?"

Because the first three are the only ones with their managerial head up their @$$. Most of the other car makers are working to develop smaller more fuel efficient cars that the public wants to buy. The big three just keep pushing the same old thing.
What I wonder about is why do the big three continue to argue that they can't make the change to fuel efficiency when they already develop cars that meet fuel and emission standards in the European market?
European standards are higher than US standards.

[mike.timonin]

Still, as Winston Churchill said about democracy, capitalism is the worst system, except for everything else that has been tried.

There are two quotes by Churchill that get cited frequently, and, perhaps, do not mean what their citers seem to think they mean. (The other one is the one about Liberals and Conservatives - that, I think, is mostly an issue of historical context). Here, I think, Churchill is just plain wrong. 1) we've never really tried democracy as a system (except for Switzerland, perhaps?) and 2) while democracy, in principle, might work better than other systems we've actually tried, can we be sure we've tried all of the possible systems? And, if by quoting Churchill, we are actively NOT trying a system, does that not make us wrong too?

As to liberals and conservatives (A man who is not a liberal when he is young has no heart, and if not a conservative when old has no head, more or less) - liberal and conservative do not mean, in a classic sense, what we take them to mean now. Someone lacking in heart as a youth would be unwilling to strike off on his own and eschew government assistance. But, when old, the protections of a neo-feudal conservative system would only make good common sense.

[Realist]

Come on. What would be the long term effect if companies never laid off anyone? When computers started coming to businesses, should companies have kept on wasteful labor rather than replace them with better technology? Then we'd have a pool of unproductive workers who could otherwise be placed in more productive positions in the economy. Employment contraction in certain industries due to changing market conditions serves a very useful social purpose, and part of that requires that companies lay people off, through no fault of management or anyone else. It should be the job of government to provide these people with a social safety net.

[Steve]

Ian: I was being snarky. And giving Fred source material for a new post.

[Julie paradox]

hapax:seven-eighths is easy (and then weigh the crumbs). Eight sevenths would be slightly more difficult, but you just end up weighing more crumbs.

Splitting base 10 into three is *hard*.

[Jim]

while democracy, in principle, might work better than other systems we've actually tried, can we be sure we've tried all of the possible systems?

OK, Mike, I'll bite. What other possible system would you propose?

I think it's important to pay attention to the limitation than any other that has ever been tried. I'm not sure it is supposed to suggest that other systems should not be tried, but rather that democracy is highly flawed (and a better system is possible), but it is still preferable to any other system of government that has been put into practice.

Of course it is probably a mistake to treat this quote as particularly indicative of Churchill's thinking. He was fairly skeptical about democracy, especially when it came to the Empire.

[madjoey]

Fred writes: On the subject of layoffs as a failure of management: It's possible to imagine a scenario in which mass layoffs are not the result of an equivalently massive failure on behalf of top management. But such scenarios are rare in the real world.

This scenario is quite common in many manufacturing sectors, particularly new ones where technological advances make planning beyond six months nearly impossible. I've been in high tech (chipmaking, and chipmaking equipment) for twenty years and the cyclicality of our industry is legendary. At my current employer it was a common practice to be laid off in a downturn, only to be rehired at +20% salary and +1 or +2 paygrades when the next upturn came around. These days we don't lay off nearly as recklessly as we once did (turns out that it's more expensive to hire'n'fire than it is to retrain, reallocate and be generally conservative in hiring), but it's ordinary that a company's direct labor force will track with the number of widgets they sell.

What's harder to understand is exactly what those 53,000 Citi employees were doing. Financial services are not a manufactured product; maybe the infinite expansion of bogus loans, credit cards, insurance policies and other financial confections finally hit a very real brick wall?

[LMM]

Considering the number of people who probably want to hang these ... guys from the nearest tree at the moment, I'd say their concerns are quite justified.

Justified, perhaps, but not so much as to justify a private jet.

IMHO, if a company has screwed up so badly that they need a multi-billion dollar loan from the feds, the upper management should not only be fired, but they should all be required to declare personal bankruptcy.

[Ian]

Sorry Steve. Your snark-fu is strong.

[cjmr]

What's harder to understand is exactly what those 53,000 Citi employees were doing.

Call center employees (Citi did actually have some domestic call centers), financial advisors, tellers/customer service reps from their bricks and mortar facilities, and, of course, 'duplicate employees' from any smaller financial institutions they've taken over in the past year.

[mike timonin]

I think it's important to pay attention to the limitation than any other that has ever been tried. I'm not sure it is supposed to suggest that other systems should not be tried, but rather that democracy is highly flawed (and a better system is possible), but it is still preferable to any other system of government that has been put into practice.

Exactly. But, so often people quote Churchill as a total defense of democracy. I'm not sure that I have another system to propose - I have no inherent problem with democracy (indeed, I think it would be nice to see some, at some point in the near future) - but I'm fairly sure that, were someone to seriously propose a new and alternative theory of governance, some wag would stand up and say "But Churchill says...".

[MercuryBlue]

I've got a couple questions about unemployment. One, why is it necessary to have a quarter to a third of the working population unemployed? (The official unemployment rates don't actually count anybody who's on disability but who could still work, or who's got a prison record but who could still work if perhaps with more supervision, or who has a spotty work history but who could still work, or anybody else that companies could hire but don't want to.) Two, assuming we could get the economy moving enough for this to be feasible, is there anything inherently wrong with the idea that it's better for companies to compete for good employees than for potential employees to compete for good jobs?

[Jeff]

Splitting base 10 into three is *hard*.

Since "bases" are simply ways of counting, splitting a number as expressed in any base is exactly as hard as splitting it in any other base.

Split 25 [base10] into 7 -- you get 3 each plus 4 left over. Split 34 [base7] into 7 -- you get the same thing.

Split 25 [base10] into 3 -- you get 8 each with 1 left over. Split 34 [base7] into 3 -- you get 11 [base7] each with 1 left over.

Am I missing something?

[lightning]

Jeff --

25 [base 8] / 3 = 7, exactly.

And while we're at it, 6 * 9 = 42 [base 13]

And computer programmers can't tell the difference between Haloween and Christmas: 31[oct] = 25[dec]

[Ursula L]

Come on. What would be the long term effect if companies never laid off anyone?

Fred isn't talking about "laying someone off" - someone who has been tested, as an individual, and found lacking in the job they have, and unable to become competent with suitable training and assistance. He's talking about mass layoffs.

That's a totally different thing. When someone, at the top of the organization, says "we're going to lay off X-thousand workers" and they proceed to lay off that number of people, without regard to whether there are that many workers in nonproductive roles, or the effect that sort of disruption has on the company's ability to do business.

Mass layoffs reduce people to numbers, have nothing to do with whether the individuals who loose their jobs are contributing to the success of the company, and greatly disrupt the productive value of the people who continue to work for the company. They destroy any sense of loyalty that workers might have to the company. They undermine any willingness of workers to take risks for the sake of the company's growth and profitability. They tend to lead to keeping the workers who are politically astute, and firing the workers who are focused on actually working.

Mass layoffs destroy the lives of good workers doing real work, and undermine the functioning of good companies providing real goods and services, for the sake of having numbers look good on paper. That's evil, by any realistic measure of destructiveness.

[cjmr's husband]

Not to mention the month of complete lack of work that occurs at a company when news of an upcoming layoff leaks.

[Reynard]

If General Motors is actually serious about surviving into 2009 without declaring bankruptcy, I have a plan that might let them do so:

GM should divest itself of all but two divisions -- Chevrolet and it's next-most-profitable division. (Pontiac? Caddilac?) Chevrolet's resources would immediately be dedicated *exclusively* to the production of the Volt, so that this model will be ready for sale by the third quarter of 2009. GM *must* also be willing to sell (and maintain) the car at a loss until at least 2014.

The other division would continue to manufacture internal combustion engine (ICE) powered* automobiles, but would immediately drop their Luxury/Large car, Heavy non-Commercial truck and SUV lines. These lines (and the parts and tooling used to make them) would be sold to the spun off divisions (at a loss, if necessary) and the plants that make them would be dedicated to either the manufacture of the Volt, or the manufacture of that divisions most profitable car line(s). Starting immediately, this division would also either a) design plug-in Hybrid* analogues to all ICE cars currently in their manufacturing lines; or b) design and build lines comparable to the Volt, and would phase-out the manufacture of ICE-only cars in *all* lines by no later than 2014.

*All* GM Board member and executive (upper management) pay would be tied to the performance of a fixed number of GM stocks in a special bloc. Bonuses would be prohibited unless *both companies* are shown to be making a profit over four consecutive quarters. All non-essential equipment (i.e. anything not directly used in the design or manufacture of automobiles or their parts -- such as corporate aircraft, limousines, unused land, etc.) would immediately be sold and the profits, if any, invested back into the company. Also; for every 3 assembly-line employees fired or layed-off without pension or benefits, one Board member or executive would also have to be fired without pension or benefits. (i.e. No "Golden parachutes".)

*All lines would immediately be switched to Flex-Fuel or E85 engines, depending on which is most fuel efficient. Commercial truck lines would be immediately switched to Bio-Diesel engines.

Yes, a lot of people will lose their jobs; but at least enough jobs *might* be spared that the Economy wouldn't take as drastic a hit as it apparently would if GM went under completely.

[lukas]

@Ursula S:

When someone, at the top of the organization, says "we're going to lay off X-thousand workers" and they proceed to lay off that number of people, without regard to whether there are that many workers in nonproductive roles, or the effect that sort of disruption has on the company's ability to do business.

Do you really think managers just make up a number so they can say "We're going to lay off X people"? They have reasons for making those decisions. If your business contracts, what are you going to do?

Now I do think that many of the things top managers do are outrageous and hurt their companies, but the people they are ripping off here are their shareholders, and those are the people that should hold them responsible.

[cjmr's husband]

@lukas: Yes, managers making layoff decisions have reasons to do so. What I question is whether there is a *good* reason. Sometimes, the reason is simply "to make it look like we're doing something". And I suspect you'll see that large odd number of layoffs is actually an even percentage point.

When there is a sane layoff, the company will announce "We are shutting down X unprofitable division".

@Reynard: You just described a sure-fire way to destroy GM utterly. They can't sell enough electric cars to stay afloat, even if they could make them and sell them at a profit. Their customer base is the manly men who want big pickups.

So yes, they should be making LP, ethanol, electric, hybrid, and biodiesel vehicles. But they can't just make one. Like you said, it has to be the most efficient one for that niche market.

[lukas]

Yes, managers making layoff decisions have reasons to do so. What I question is whether there is a *good* reason. Sometimes, the reason is simply "to make it look like we're doing something". And I suspect you'll see that large odd number of layoffs is actually an even percentage point.

Oh, I do agree on that. The stock market is easily deceived temporarily by those announcements. But again, if it was a bad business decision, its effects will show in the long run.

When there is a sane layoff, the company will announce "We are shutting down X unprofitable division".

Not necessarily. If you just lose business, the company needs to slim down, and this may mean firing a certain percentage of your workers more or less across the board (except at the top managerial ranks of course, conflict of interest, rah rah). The way this is announced, though, "Aren't we awesome, we just managed to get rid of X people", is... unfortunate. I don't know if it's in the press release like this, or if the number of layoffs is just what the media locks in on. It seems to me that the actual number of layoffs wouldn't be particularly relevant to investors, they'd rather want to know what those people were doing and why they are not needed any more.

[cjmr]

Chevrolet's resources would immediately be dedicated *exclusively* to the production of the Volt, so that this model will be ready for sale by the third quarter of 2009.

I don't think you could get the Volt ready for sale by the third quarter of '09, even if it were already at the point where they were ready to re-tool (a) production line(s) for it. Which it isn't. And dumping more money/people on a project does not necessarily speed things up in the auto industry, since in general the first three months will be wasted in meetings getting all the new people up to date on the project.

(Why yes, I do have family in the auto industry.)

[Ecks]

Getting pension funds to vote to give the workers a better deal is all well and nice, but it would never happen. The pension funds' one driving interest is to generate revenues for their retirees, which means they need either big dividends, or stock values to go up. There is no way they would ever vote for anything that did not go directly to those ends (without getting fired and replaced, that is). And mass layoffs are often a good thing from the point of view of a company's stock price and future dividends... or, at least, enough traders think so that they will act on this understanding.

Idealism is all well and good, and is often expressed in stock markets right up until the second it is against someone's short term interests to do so.

[ramya]

Thanks for sharing such a great information about democratic management,it clearly explain the employees troubles....

-----------
Ramya

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[Bernhard]

may I point out that GM also is about to revolutionize driving with this? http://gm-volt.com/ ?

I think they kinda got it and for that alone they need to survive.

[hapax]

Forgive me for the technological stupids, but isn't a massive switch right now to electric-powered vehicles a BAD idea, considering the state of the electrical grid in the USA?

Aren't we currently coping with power shortages and rolling brownouts? I know that in my state of current residence, the power system still depends largely on shallow buried cables with cracked insulation, to the extent that every time it rains, the lights go out.

Not to mention the fact that our electrical grid depends heavily on carbon-based fuels -- and pretty dirty ones at that -- for most of the power generation, and we still haven't figured out a good, clean, and politically acceptable solution to nuclear waste disposal.

[Bernhard]

well, no coal power station is as dirty or inefficient as an internal combustion engine in a car. secondly filtering a big coal power plant is _much_ easier than millions of cars individually and 3rdly your power plant dowan't drive along in front of you children's daycare centre or idles away in a parking lot.

[Ursula L]

Do you really think managers just make up a number so they can say "We're going to lay off X people"? They have reasons for making those decisions. If your business contracts, what are you going to do?

In Fred's example, 53,000 layoffs at Citigroup, that is exactly what they are doing. You don't get a nice round number by carefully looking at your business and deciding what jobs are and aren't necessary. You get that round a number by pulling it out of the air.

If your business contracts, you can't save it by cutting across the board, or laying off X number of people. You have to know what your business is, how the product is made/provided, and what jobs are needed to do the job for the customer. If you lay off a third of your factory workers, you're left with a factory that can't function, because it takes certain people doing certain things to make your widget.

Part of the problem is the entire idea of "business administration" - the idea that a business can be run by knowing how to run business, rather than by knowing, intimately, the particular business, its products, and its customers. The MBA has done more damage to the US economy than most of the "usual suspects" for why businesses go wrong.

[Reynard]

Posted by Bernhard: may I point out that GM also is about to revolutionize driving with this? http://gm-volt.com/ ?

I think they kinda got it and for that alone they need to survive.

May *I* point out that GM built an Electric car, gave a few people an all-too-brief chance to drive it, and then demanded them back and scrapped all but a few and, in the face of evidence to the contrary, whined that there was "no demand"? Even GM's own R & D chief "...now wishes GM hadn't killed the plug-in hybrid EV1 prototype his engineers had on the road a decade ago: 'If we could turn back the hands of time(...)we could have had the Chevy Volt 10 years earlier.'"

They may have "kinda got it", but why the hell did it take them ten freakin' years?

Posted by Ursula L: The MBA has done more damage to the US economy than most of the "usual suspects" for why businesses go wrong.

As I've said many times: MBA = More Bad Advice.

[Reynard]

@ cmjr & cmjr's husband: I posted a response to your posts Saturday night, but Fred's anti-spam program hasn't let it through yet. If It hasn't gone through by Midnight tonight, I'll try again. If it doesn't clear by then, would you like me to e-mail it to you? (Though, in all honesty, I'm quite blunt about my antipathy for the Big Three -- and GM in particular.)

[Bernhard]

have a look at www.autobloggreen.com as to why the EV-1 died, there is a good series about it. In a nutshell: it was too early. They lost a billion bucks on it.

[lukas]

In Fred's example, 53,000 layoffs at Citigroup, that is exactly what they are doing. You don't get a nice round number by carefully looking at your business and deciding what jobs are and aren't necessary. You get that round a number by pulling it out of the air.

I suspect that number is rounded. I've read "over 50,000", "52,000" and "53,000" in news reports. And 53,000 is not that round anyway.

If your business contracts, you can't save it by cutting across the board, or laying off X number of people. You have to know what your business is, how the product is made/provided, and what jobs are needed to do the job for the customer. If you lay off a third of your factory workers, you're left with a factory that can't function, because it takes certain people doing certain things to make your widget.

Sure, but if demand for your product drops, you'll run losses unless you adjust to the new circumstances. And yes, this involves essentially looking at each employee to decide if their services are still going to be needed, if they must be transferred to another division of the business, or if they'll have to be let go. This is why you have an entire hierarchy of management that takes care of all the information gathering and communication. The number X that tells you how many layoffs will occur is an end result of that process, not the starting point.

Part of the problem is the entire idea of "business administration" - the idea that a business can be run by knowing how to run business, rather than by knowing, intimately, the particular business, its products, and its customers. The MBA has done more damage to the US economy than most of the "usual suspects" for why businesses go wrong.

What do you think those managers do all day? They familiarize themselves intimately with the particular business, its products, and its customers so they can apply their knowledge about how to run business in order to devise a business strategy for the future. It's what they get paid to do.

[Headless Unicorn Guy]

You don't get to traumatize and place at risk 53,000 people and their families and then pretend it was just some kind of fluke natural occurence, like a hurricane or earthquake, and that you have no moral or ethical responsibility for the consequences of your decision.

And you DON'T compound the stupidity by jealously defending your Constitutional Right to eight/nine-figure Management Bonuses and Golden Parachutes and Personal Learjets before Congress and media when everything hits the fan. That's the sort of pointy-haired management reaction that makes Nationalization-to-Communist-Revolution VERY popular.

Part of the problem is the entire idea of "business administration" - the idea that a business can be run by knowing how to run business, rather than by knowing, intimately, the particular business, its products, and its customers. The MBA has done more damage to the US economy than most of the "usual suspects" for why businesses go wrong. -- Lukas

Because getting an MBA degree does nothing more than train you how to be a Pointy-Haired Boss.

"If I lay off ALL my employees, I won't need to pay them. I can save enough money that way to get a positive cash flow from equipment depreciation alone. Big Management Bonus, Here I Come!" -- Dilbert, "Your Boss's Brain"

J Michael Strazynski has a lot of horror stories about his time writing/producing Babylon-5. A LOT of them deal with pointy-haired studio management types whose first words out of their mouth are "I'M AN M.B.A. AND..."