June 20, 2003
economic implications of layoffs
when a 'cash flow positive' corporation lays off people during a recession what do they expect to accomplish?
do they think that their stock price will go up? i hope not! this is the worst time to lay off because in a recession, your stock price simply will not be budged.
in fact, the smart corporations that are producing more cash than they are spending will stay the course. they may use this as an excuse to get rid of folks that no one likes, but in general, they will spend their way out of a recession. witness intels behavioiur over the last 3 years (2003 and earlier). they are hanging tough. when the upturn occurs, and it will, they will be more powerful than ever as the work they accomplished during the 3 years puts them ahead of all their competitors. in fact, they won't have to hire in the upspike when salaries would become competitive again. no, if they do much at all to bump the stock price it will be done in the height of the business cycle, not the bottom. any other behaviour is just playin' around.
if you don't have the cash, you gotta do what you gotta do. but if you do have the cash, you need to think it through. i believe that most layoffs by cash flow positive companies during a recession are probably to get executives bonuses.
there is a societal implication here. it used to be 'taboo' to lay off. companies had to really think it through. it was very bad karma. now they do it so cavalierly. what's interesting to note is that now they all do it as a knee jerk. it's making our business cycles particularly sharp. i'd go so far to say that it borders on criminal to do it during a recession if you don't have to. i think the politico's need to bring pressure to bear (not legislation) on the companies so that they don't dump on our economy. it's un-american.
when a 'cash flow positive' corporation lays off people during a recession what do they expect to accomplish?
do they think that their stock price will go up? i hope not! this is the worst time to lay off because in a recession, your stock price simply will not be budged.
in fact, the smart corporations that are producing more cash than they are spending will stay the course. they may use this as an excuse to get rid of folks that no one likes, but in general, they will spend their way out of a recession. witness intels behavioiur over the last 3 years (2003 and earlier). they are hanging tough. when the upturn occurs, and it will, they will be more powerful than ever as the work they accomplished during the 3 years puts them ahead of all their competitors. in fact, they won't have to hire in the upspike when salaries would become competitive again. no, if they do much at all to bump the stock price it will be done in the height of the business cycle, not the bottom. any other behaviour is just playin' around.
if you don't have the cash, you gotta do what you gotta do. but if you do have the cash, you need to think it through. i believe that most layoffs by cash flow positive companies during a recession are probably to get executives bonuses.
there is a societal implication here. it used to be 'taboo' to lay off. companies had to really think it through. it was very bad karma. now they do it so cavalierly. what's interesting to note is that now they all do it as a knee jerk. it's making our business cycles particularly sharp. i'd go so far to say that it borders on criminal to do it during a recession if you don't have to. i think the politico's need to bring pressure to bear (not legislation) on the companies so that they don't dump on our economy. it's un-american.
June 17, 2003
do you remember the last time your mom cut your hair?
i do.
i was sitting on the chair in our laundry room and my mother was cutting my hair using electric clippers with a hair guard.
so far, so good.
as she is cutting, i hear this clicking noise on the floor and then the clipper starts pulling hard. you know the sound, like when a lawn mower goes through extra tall grass.
then she turns off the clippers and starts laughing.
it turns out that when the guard falls off you can cut a large bald spot onto a 13 year olds head pretty quickly.
she was absolved of her haircutting duty.
i do.
i was sitting on the chair in our laundry room and my mother was cutting my hair using electric clippers with a hair guard.
so far, so good.
as she is cutting, i hear this clicking noise on the floor and then the clipper starts pulling hard. you know the sound, like when a lawn mower goes through extra tall grass.
then she turns off the clippers and starts laughing.
it turns out that when the guard falls off you can cut a large bald spot onto a 13 year olds head pretty quickly.
she was absolved of her haircutting duty.
