http://upload.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6707014Oh my.
Crazy Dave (1000+ posts) Tue Oct-06-09 08:40 AM
Original message
You can thank businesses like where my wife works for the recession
A year and a half ago things were going great where she works. She and the rest of her coworkers were very busy and working a few hours overtime every week. Then the media starts talking about how bad the economy is and how many companies are laying people off, etc. What does her company do? They start laying people off and cutting back employee hours just to follow the trend. Everybody else is doing it so shouldn't' we was their thinking. It was a corporate not a local decision.
What has happened since then? Her stores customers got tired of waiting four hours or even until the next day for their orders due to the shortage of workers when they used to get them in two hours or less. Within two months her store lost 18% of their customers to different competitors and they had to lay another person off. Now they can't compete with the competition or persuade their old clients to come back because corporate refuses to let them hire the help they need "until the economy gets better" even though the customers told my wife's boss, "if we can get our orders as fast as we did a year ago we'll come back".
Instead corporate is spending big bucks retraining managers and employees. Making them go to seminars and watch videos on customer service and production.
Yeah...that's what we all need to do to get old customers back and help economic recovery, watch videos and listen to some motivational speaker getting paid with our bonus money.
CoffeeCat (1000+ posts) Tue Oct-06-09 09:08 AM
Response to Original message
3. I'm wondering...
...if the company--as a whole--began suffering as a result of the recession--and they made across-the-board cuts that affected the store in which your wife works?
I am sceptical that a business would just "follow the trend" for absolutely no reason.
It sounds like the company made really stupid decisions--but I bet the corporate cuts that caused understaffing at your wife's location--were legitimate cost-cutting attemps--that weren't thought out well.
They probably cut labor a certain percentage across the board.
AllentownJake (1000+ posts) Tue Oct-06-09 09:16 AM
Response to Reply #3
5. Don't be skeptical
Companies are pretty dumb.
Remember the Japanese got into the American Car market because GM purposely started making worse cars thinking that if the car fell apart after 5 years that Americans would have to buy another one of their cars in 5 years.
pokercat999 (1000+ posts) Tue Oct-06-09 09:36 AM
Response to Reply #5
7. I worked for a major player in the auto repair aftermarket (not car dealers) with over 1000 retail locations. It was amazing to me to see the middle management continuously lying to department VP's and even the CEO. Telling them just what they wanted to hear, that their programs were simply genius and were saving the company. At the bottom of a very short ladder in the operations department I found the way to get out of doing stupid crap was to simply mention that I was thinking about sending an email detailing the lies to the CEO, presto new assignment. Finally so much of what we were doing was useless self promotion, just patting one another on the back, I just left. I still have friends in the company and even 18 year veterans are putting together resumes.
AllentownJake (1000+ posts) Tue Oct-06-09 10:09 AM
Response to Reply #7
14. In my opinion at some point Too big to Fail becomes too big to succeed.
Hmmm. "Too big to succeed" sounds like a pretty good argument against Big Government.
Crazy Dave (1000+ posts) Wed Oct-07-09 08:51 AM
Response to Reply #25
28. That's happening where I work
Losing dozens of clients and laying off people and shutting down different departments month after month.
The company refuses to adapt or change to the changing consumer, their demands and the newer technologies available that our competition is using and gaining market share with.
They want to do business the same way they've been doing it for over 30 years and instead of changing things for the better and out of necessity, it's easier to blame and punish people at the bottom for why the loss of business even though they're not the ones making the self destructive decisions.
Kind of like our politicians. They create problems for us then campaign against them.
Uh huh. And who's running Congress?
Prism (971 posts) Tue Oct-06-09 09:18 PM
Response to Reply #3
23. Many corporations tend to do this sort of thing
If they have reason to believe business will slow in the foreseeable future, they'll often try to get ahead of potential losses in profit by trimming costs, downsizing, and streamlining. It's definitely a corporate thing. They only see numbers on paper and calculate accordingly.
Smaller businesses, where they see and know the people who work for the company every single day, tend to try to hold onto employees as long as possible and only let them go when there's very little choice in the matter.
Depressing, but it happens. It's a difference in the business environment.
bertman (1000+ posts) Tue Oct-06-09 09:13 AM
Response to Original message
4. Was your wife in a position to know (not hypothesize) that the business was in a good enough state to not need layoffs?
Being a business owner I find that my employees, though good people who work hard and are honest, have NO CLUE about what it takes to run a business.
Last year at a business meeting, my business partner and I told our employees how much of our cash we have invested in the business as our part of owner capitalization. They were floored. None of them had any idea that we had ANY money invested in our own company and that we could lose our asses if the economy tanked.
Crazy Dave (1000+ posts) Tue Oct-06-09 09:14 PM
Response to Reply #4
22. Her store always exceeded quota and it wasn't her manager's idea to cut staff
It came from a board room hundreds of miles away. Old clients keep telling her boss they're willing to do business with them again if they can get the same service they had a year ago when the store had a full staff. That would mean more business and making quota more often but her boss keeps getting told by corporate he can't hire more people until business picks up first.
They've only made quota once in the past year since the staff cuts and client migration elsewhere.
The skumbag primitive shows up, but never mind.
chemp (435 posts) Tue Oct-06-09 09:43 AM
Response to Original message
8. My company did the same thing
I work for a contract company that works for the state. For the three years I have worked in my current unit, sales and profits have increased dramatically every year. My unit alone has increased from a $8.4 mm per year account to just under $12 mm per year.
Yet, when the economy started to falter, and our sales remained steady to a slight increase, it was mandated to cut the staff, cut labor and reduce hours. This is making my workers work much harder for the same menial pay they always get (or less if their hours were reduced). That was last year.
Now MY BUDGET calls for further reductions in labor, and an increase in sales, or, in other words an increase in sales per labor hour.
My sales went up 15% across the board last year. My labor went down. My boss gets a 20% bonus, I get the usual 4% raise. My (union)employees get the shaft. And everyone wonders why the rank and file are getting fed up.
Canuckistanian (1000+ posts) Tue Oct-06-09 10:00 AM
Response to Original message
12. A lot of these companies are killing themselves off doing that
Manufacturing companies can't afford to warehouse surplus goods, so they cut back drastically on production, even BEFORE the slowdown actually hits.
And the result is major shortages, backorders and lost sales. Some companies need a steady supply of goods and can't wait for backorders. And consumers tend not to wait for goods, but rather buy what's immediately available. So, they're forced to go to another company or go overseas.
That's the big problem with these "Just in Time" models. It assumes that the supplier can maintain a steady supply of goods at a certain rate and a certain price with enough "headroom" for production spikes.
And ONE company that drastically cuts off production prematurely causes a slowdown of the whole manufacturing chain and ultimately, a whole industry.
And the results are unsatisfied customers, massive layoffs and non-circulating capital. It's a self-defeating system.
SteelPenguin (1000+ posts) Tue Oct-06-09 10:17 AM
Response to Original message
15. Let me play Devil's Advocate
Firstly, it sounds like the business let it's current business actually suffer from this, which is kind of ridiculous.... BUT...
They were following a recession survival playbook. What you're describing is NOT unheard of. Business is doing fine, recession hits, they're still doing ok, but they cut people anyway. Now most people would look at that and say "How Ridiculous!" but there is actually a reason for it. It's been shown that in previous recessions, the companies that made cuts, trimmed down to bare bones, survived longer. The company was probably trying to be proactive, and trim off anything they absolutely didn't, in order to reduce their payroll, and protect themselves from future effects of the recession, to better escape it.
Of course if you cut people from a working line that is already at over 100%, or from long term research projects you're gimping your company.
Basically to me it sounds like they were trying to do the right thing (for the company long term survival) in laying people off, but they laid off the wrong people, and kinda ****ed themselves. That's a botched management decision right there...Not the laying off of people, but which people they laid off. The managers and people being retrained should have been laid off, not the people on the line working 110% hours.
Lydia Leftcoast (1000+ posts) Tue Oct-06-09 10:27 AM
Response to Original message
17. You can put people through an MBA program...
...but you can't teach them common sense.
In fact, MBA programs teach people to forget common sense and work according to formulas and trends.
letmebefrank (4 posts) Tue Oct-06-09 11:33 AM
Response to Original message
20. You're only looking at the situation from your side
As co-owner of a service business for over 21-years, I can tell you that anyone who thinks these companies are laying people off "just because everyone else is doing it" or for any reason other than survival, is flat wrong.
Our company made many strategic adjustments during 2008 because we saw the problems looming on the horizon. However even with all of our plans in place, we had no idea our sales in January would be down by 45%. Those of you who don't operate a small business, you don't understand what it's like to maintain employment for 20+ people when your revenue suddenly declines by almost half.
On top of that - in 2008 - we had more bad debt write off than in the prior 20-years of our business COMBINED. Again, for small businesses who are already operating on wafer-thin margins, I cannot emphasize enough how awful the current business climate is.
We adjusted immediately by cutting back to 35-hour weeks and eliminating paid holidays. It sounds harsh, but we were able to avoid laying anyone off - SO FAR. However we are still struggling, and there is NO CREDIT available in the marketplace. Larger vendors are cutting back on terms and credit lines as well. It's horrible.
I've been through the early 90's recession, the dot-com bubble burst, the post-911 decline: Nothing has ever compared to this cycle. You have no solid proof that people went somewhere else because their orders weren't filled fast enough. I know many small businesses who would have been able to survive if their revenue had fallen only 18%. Take a drive around your area, look at the strip malls and downtown offices. The vacancies are skyrocketing.
Also you should keep in mind that, depending on how you define "small business", that we provide employment to somewhere between 70% and 90% of this country's workers. When small business is suffering, the country is suffering. "Corporate", too.
Improving remaining staff with training and seminars makes perfect sense to me. Most of the other business leaders that I know are trying desperately to put their best foot forward. It's called survival of the fittest. Sorry but I do not agree with the tone or topic of your post. You and your wife should probably be thankful that the opportunity still exists, and perhaps with a better attitude her branch could turn things around internally. It's amazing what can be done with a positive attitude and some hard work as opposed to complaining and second guessing management decisions.
Crazy Dave (1000+ posts) Tue Oct-06-09 09:25 PM
Response to Reply #20
24. Yeah...that's why 18% of the clients left...no positive attitudes
It wasn't having half the employees they once had plus making them work 10 hours less a week which made orders take longer to get out the door so clients went elsewhere.
Think about it, half the people working less hours means less product out the door you tool.
I know....you can't understand the math since you're one of those George Bush children that got left behind.
Ikonoklast (1000+ posts) Tue Oct-06-09 09:48 PM
Response to Reply #20
26. Hahaaa!! Really?
...and perhaps with a better attitude her branch could turn things around internally. It's amazing what can be done with a positive attitude and some hard work as opposed to complaining and second guessing management decisions.
That's the funniest load of pure management happy-talk bullshit I've heard in years, and I was in management for twenty years.
Cut their pay, and expect your employees to retain a 'positive' outlook.
Expect employees to work harder for less money and benefits.
Blame employees' attitude for lack of customers, not the lack of cash in customer's pockets.
Training and seminars are the quickest way to get rich...IF you are a training and seminar pitchman selling your moonshine to gullible business owners.
If you don't know how to give excellent customer service already, having an 'expert' tell you how to do it ain't gonna work. You are already sinking.
And many of the failures in small businesses is a direct result of poor management. They get arrogant, and will not accept sound advice from their employees, who know their jobs and can tell where economies and improvements can be made.
Sometimes they need to be second-guessed.
rucky (1000+ posts) Wed Oct-07-09 08:56 AM
Response to Original message
29. Self-fulfilling prophecy.
I suspected some of that was going on. Who are these idiots in the boardrooms? It's just another example of how the upper classes are completely out of touch. I doubt they've learned their lesson, though. They're probably just blaming the economy and not connecting labor with value.
Ho-hum. What is today, by the way?
October 6, 7, or 8, 2009, or something?
Didn't the primitives promise us things would be changed, in the twinkling of an eye, at 11:01 a.m. January 20, 2009?
What is that? Like, about nine months ago?
What's up with that?
