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Jay Kinker - Entrepreneur, Strategist, Technologist

Every time recession hits market we start seeing so many people loosing jobs. This happens across business domains.

Every single person; from a clerk to the CEO, everyone know that such rough phase is going to come periodically irrespective of what business they are in. What kind of planning is done by the leaders (CEOs, VPs, …) to handle those situations? I see very less enterprise globally who manage their good-bad phase without (or minimal) people layoff. Who is to blame for this? Let me ask another question – Who takes the most credit for all or most business success?

I understand that everyone does business for profit. My only problem is that business houses start firing people too early. Instead, I feel they must take additional measures. I don’t think head count could be one of top factors that save lot of money for an enterprise.

Examples:
       -  You can save much more by using better technologies, solutions, and processes than what you save by firing people.
       -  One business trip of 1 top executive in many cases could cost more than a month’s salary of an employee who is fired.

I am not one of top executives who are involved in taking enterprise wide decisions and business strategies but from where I see – I clearly see major gaps. I know it may be simple to write but definitely not simple to implement.

Many times its pure situation due to which layoff is done; but many times I also see people loosing jobs because of their leaders.

Posted on Sunday, August 31, 2008 7:40 PM Whatever... | Back to top


Comments on this post: Cost cutting... Is it being done correctly? Who to blame?

# re: Cost cutting... Is it being done correctly? Who to blame?
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The reason that companies lay people off first is because it gives them a bigger net change in the least amount of time. The wage of an employee is a variable cost that can be much more controlled than the fixed costs of machinery.
While you have an excellent idea about using better technologies, that is usually a big investment (capital cost) that will take time to implement and take time to get the full return on investment.
Additionally - how many companies are tracking their actual return on investment after a project goes live? They track costs beforehand, but usually see the implementation as the end of the project.
Left by Scott Miller on Aug 31, 2008 7:59 PM

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