RE: Fw: Back to Serfs and Royalty?

From: Harvey Newstrom (
Date: Sat Sep 01 2001 - 16:07:31 MDT

Samantha Atkins wrote,
> Harvey Newstrom wrote:
> > The problem, as I see it, is that these CEOs don't deserve a
> raise for these
> > layoffs. The logic is that cost-cutting makes the company more
> efficient
> > and raises profits. However, these layoffs aren't really cost-cutting.
> I think this view misses a few things. No CEO enjoys laying off
> employees. It is one of the toughest and most delicate tasks
> that a CEO can face. But it is the CEO's job (and why he makes
> the big bucks) to make even hard and personally painful choices
> for the good of the company he was hired to lead.

I never said it was an easy job. My point was that it was difficult to do

> If the
> business climate changes and many projects that people were
> hired for simply will not fly in the current climate and when
> they will is unknown there is little good sense in keeping the
> people on if they cannot be integrated into other projects
> likely to be successful. And this is only one of many, many
> scenarios that could make layoffs a necessity for the health of
> the organization.

I never said to keep the people on. I said that after the people are laid
off there is a second step that must occur. If the company doesn't adapt
itself in some way to be able to do more with less people, the cutbacks
alone won't solve the problem.

> A business is not in business primarily to give its employees
> employment. It is primarily in business to be a profitable,
> successful enterprise within certain stated company objectives.
> It is the CEO's job to ensure this success to the maximum of
> his/her abilities. It is a tough job.

I never said it was. I was discussing the value to the shareholders. I
never discussed employee benefits.

> This is nonsense. The organization must grow and shrink in
> response to the environment and its needs.

I never said that companies shouldn't grow and shrink. I am describing how
they must do this to adapt. Growing without adaptation is bloat. Shrinking
without adaptation is starvation. Adaptation must occur to function with a
different resource mix. Otherwise, the new resource level doesn't match the

> Layoff employees that you can no longer gainfully keep is
> logical and utterly necessary to the health of the company and
> to the continued employment of the rest of the employees.

I never said it wasn't. Are you even reading what I wrote? None of your
points seem to address what I said. Your statements don't dispute anything
I said.

> Actually, this is largely false. During hard times various
> means of cost-cutting and changes of working methodologies are
> put into place.

This is exactly what my posting said. Cost-cutting alone is not enough. It
must be followed by changes of working methodologies.

> This is BS. Try the job yourself some time and see what you
> think.

I have a business degree and have run my own consulting company for a
decade. All my employees more than six figures, and I have never had to lay
anyone off. Even in so-called hard times, I find a way to adapt.

One of the reasons I believe this, is that my company provides the temp
workers to replace the laid-off employees. CEOs lay off employees to
impress stock-holders. Then they don't change their business plan, so they
still need workers. So they hire temp employees at double or triple the
salary of the original employees. The companies lose money faster. Those
that listen to my advice on how to become more efficient will survive.
Those that don't and try to do the exact same job with less resources will
fail. Without increased efficiency, less resources equal less value.

I am not just playing armchair businessman here. I actually am practicing
what I preach.

Harvey Newstrom <> <>

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