Wednesday, September 27, 2006


"Cutting Costs" Often Little More Than A CEO Reflex

A recent article in Slate lampoons executives whose cost-cutting measures are more often than not reflexive and arbitrary. The vastly successful investment bank Credit Suisse has cut back on color Xeroxes (that specifically) and deal-closing dinners. Yahoo, in a variation of Scroogian stinginess that cunningly masquerades as its opposite, plans to give its employees the week off between Christmas and New Year. Without pay, of course. And, by the way, this "vacation" is mandatory, not optional. According to Yahoo's HR boss, this is so that workers might "enjoy guilt-free time off while helping Yahoo reduce unused vacation time". Unh-huh... I'd rather keep the money, thank you - I need to buy Christmas presents. J.P. Morgan Chase, as another example, likewise cuts costs in a random fashion - pretty much the way mortarmen drop their shells on unsuspecting troops. CEO James Dimon has been applauded for closing employee gyms and depriving its minions of free cellphone privileges. It is enough to make one believe that corporations throw perks to their employees just so they can take them away when the time comes to "economize".

According to Slate, "what ends up infuriating employees is that the scrimping on minor employee perks co-exists with a pay-any-price attitude for so much else". Million dollar bonuses to top executives are rarely suspended, and CEO salaries are almost never cut. Not only are these scattershot attempts to control costs nit-picking to the point of neurosis - they are also completely hypocritical.

Here's a tidbit for those who support Our War Against Islamo-Fascism: A Saudi prince named Alwaleed bin Talal, a major shareholder at Citigroup, has recently demanded "draconian" cost-cutting actions to be taken against the firm's employees - many of whom happen to be American. Hypocrisy is too mild a word when an Oil Sheik, of all things, starts gettin' medieval on the pocketbooks of the company serfs...

Slate suggests that the many "mindless, ultimately meaningless cost-cutting actions by gigantic corporations" are one of the first signs of a slowing economy. The canary in the mineshaft, so to speak. And that "we've reached the moment that occurs in every business cycle, before the new gets very bad, when successful companies start turning their employees upside down in hopes of shaking out a few pennies". In other words, gird your loins against the onslaught of the ludicrous and the unexpected - the worst is yet to come.

"Pinching The Penny Pinchers" from Slate

See that is what has been baffling me about this economy for quite some time now....we speak about how it is growing greatly, but in all actuallity it is only growing for the select few at the top of the pay scale.

I don't really know when companies are going to learn that if you treat your employees well they will treat you well with higher productivity ergo higher profits
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