Mass Layoffs by Profitable Firms a 'Horrible Act,' Diller Says

Discussion in 'Wall St. News' started by S2007S, Dec 10, 2008.

  1. S2007S


    Mass Layoffs by Profitable Firms a 'Horrible Act,' Diller Says
    Posted Dec 10, 2008 11:17am EST

    This week has brought another round of big layoffs from companies in diverse industries, including Sony, Rio Tinto, and our parent, Yahoo.

    The mass layoffs are obviously a response to a steep economic slowdown but are causing a rethinking of the very role of capitalism in society: Do businesses serve the greater good, or merely the bottom line?

    At the Reuters Media Summit last week, Barry Diller, CEO of IAC/Interactive, slammed other media executives for their "preemptive" layoffs:

    "The idea of a company that's earning money, not losing money, that's not, let's say, 'industrially endangered,' to have just cutbacks so they can earn another $12 million or $20 million or $40 million in a year where no one's counting is really a horrible act when you think about it on every level," said Diller, who's been known to lay off workers from time to time. "First of all, it's certainly not necessary. It's doing it at the worst time. It's throwing people out to a larger, what is inevitably a larger, unemployment heap for frankly no good reason."

    In some ways, it's hard to blame these CEOs: American capitalism circa 2008 is set up so that short-term performance not only gets the greatest reward, it's the only thing that matters. Until Wall Street, investors and CEOs stop the myopic focus on quarterly results, America's economy is going to continue to suffer from the perils of short-term thinking (and have periodic booms when profits are good.)

    It's possible, even likely, the ongoing crisis will prompt a reassessment of our obsession with short-term profits. It already has many Americans questioning their faith in the current system, as Michelle Rabinowitz, a recently fired MTV producer, explained to the New York Times:

    "A lot of young people had to find jobs after 9/11, so we know about tough times, but at least we know what that was about," she said. "I go outside and the sky is not falling, but my job is not there, the value of the apartment that I bought is not there, my 401(k) is not there. It's weird, it's like somebody made a bad decision somewhere — the Federal Reserve, a media company, an executive, who knows? Everything sort of looks the same, but everything has changed."

    The good news is America is overdue for a serious rethink of capitalism's role in society. The bad news is these kind of dramatic societal shifts typically don't occur smoothly. The recent takeover by a Chicago factory by fired workers may just be the first of many such incidences; few are likely to be resolved so peacefully.
  2. You and BuyLoSellHi really do post the most interesting threads ... everyone knows that these bastards are cutting ballast to keep their ship afloat.

    Hell, they wouldn't hesitate to throw their own mother under the bus if it insured a profitable quarter for them. :eek: :mad:
  3. Only after they have removed her gold teeth and cut of her wedding ring:mad:
  4. I have a different theory (still on the drawing board) but incidents such as these layoffs, down sizing, etc, somehow I think are gov't related.

    Think of the gov't as a business consultant. They have these effeciency experts examining corporate structures. The go'vt locates fat in cos and design regulations, that do not necessaily harm the company if the cos would only trim the fat (hence downsize, etc). Those that work to the regs the gov't proposes get to continue in business, supposedly leaner, trim and fit but heavily regulated and no harm to productivity, fewer people of course.

    I'm not saying this is what has happened here.
  5. The Bob's?

  6. You lost me. What are the "Bob's"?
  7. Maybe your brain wasn't there, anybody ever thought that maybe it was your brain that picked your job, picked your 401k , picked your shitty apartment that YOUR brain bought.

    Oh wait, its not my fault, it must be everybody elses.
  8. It's a reference to Office Space, the movie. The two consultants brought in were both named "Bob"
    "What would you say, you do here?" (and then the look in the picture above)
  9. no company owes anyone a job.

    if they anticipate the economy turning bad, which it is, then they need to do whatever it takes to keep the company profitable, not wait until they lose money before acting, like gm. some of you have a problem with this?

    no wonder some of you will never be a ceo. your company would turn into chrysler/gm before long.
  10. With the billions and billions of dollars being given to these companies by the U.S. Government (ie, taxpayers money) to insure their solvency so that those self-same taxpayers can be gainfully employed ... you'd damn well better believe that these companies owe people a job.

    Oh, I see, your thinking is "pay for my fucking bailout and I don't owe you shit" ... you must be the smart one. :p :D

    P.S. While we're on this topic, I bet you think those incompetent CEO's are owed millions of dollars in bonuses. :eek: :mad:
    #10     Dec 10, 2008