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Happy Holidays everyone! Here's something to ponder for those who are, have, and will be laid off.. David Greising Cut-cut strategy adds up to more Motorola woes Published December 19, 2001 The grim reaper struck again in Schaumburg on Tuesday. By that I mean Motorola Chief Executive Chris Galvin axed another 9,400 jobs. From a head count that once stood at 150,000 positions, Galvin's body count now will reach 48,400. And counting. Motorola won't say precisely what Galvin has up his sleeve for the coming quarter. Chances are it's a paring knife. Or a broadax, probably. Motorola predicted "further ongoing and rigorous efforts next year to improve efficiency and competitiveness." That's corporatese for, "Somebody reorder the pink slips. We'll need more of them come January." Motorola is hardly alone. Just last week Boeing expanded its hit list to 25,000 jobs next year. You name the industry, and big players are cutting big numbers. The airlines are dumping more than 100,000. IIT, BellSouth, Aetna, American Express, Qwest and jeansmaker VF Corp. are among the more recent ax handlers. Boeing executive Alan Mulally apologized for the timing of Boeing's cuts. By this he meant, "I know it's an awfully Scroogey time to be telling people to hit the streets." From the workers' point of view, there's never a good time for layoffs. Even so, holidays are particularly tough. No one wants to be turned out of work when it's time to put a turkey on the table. Yet from the bosses' point of view, it's about the reverse: Layoffs can be most effective when the wassail is brewing on the stove. The thinking is fairly simple. The CEO needs to hit the promised year-end numbers. Or, in the present climate, the CEO hopes to come close to the recently downgraded forecasts. If a few thousand jobs can help, well, that's the price of pleasing Wall Street. Wall Street loves layoffs. In the short run--which is the only run that matters with stock analysts--layoffs cut costs. The lower costs help the company meet analysts' predictions, which makes the analysts look smart, which helps their firms sell more stock, which makes the analysts' bosses happy and can make the stock price go up, which makes the CEO look good. Eliminate a few phrases in the above paragraph, and you get the following simple statement: CEOs fire workers because CEOs think layoffs make them look good. And every CEO likes to look good at the end of year. That's when performance reviews are done. That's when bonuses are set--though the bonus jackpot will run a little light at most companies this year. All of this brings us back to Galvin and Motorola. The company is a mess in so many ways, it's hard to keep count. And certainly, it's been hard to keep count of the many layoff announcements. Galvin explains that he thinks this has been the most effective way to cut jobs: position by position. One at a time, practically, as business demands. Sounds reasonable enough--assuming you're reading it in a business-school textbook somewhere. But in the real world, it hasn't worked at all. Serial layoffs fail on two levels. First, they're counterproductive for the company making the cuts. They're bad for morale. They're distracting. They breed nothing but insecurity and distrust. Outside the cubicles, they don't work, either. When announcements come a few thousand at a time, as Motorola has made them, there's very little "announcement effect." There's not a big number for Wall Street analysts to seize on and sell in their stock reports. Worse still, piecemeal cutbacks leave the impression that the CEO doesn't have much of a grasp. A few thousand here, a few thousand there, and before you know it, there are a few dozen analysts wondering if the CEO has any idea what's going on. But then, most Motorola watchers have long ago given up hoping the company could forecast its own future. The company was predicting a full-year profit as recently as April. As recently as its major August analyst meeting, it declined to offer any forecast for 2002--and that was before the business uncertainty introduced by the Sept. 11 terrorist attacks. As Motorola stands now, there's probably only one forecast we can really rely on: more trouble ahead.

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Sorry, Scooter. Perversion and profanity will not be tolerated here. Guests who tread in those shallow waters are not welcome and will be obliterated. Thanks for checkin' in, though.

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The reindeer's pretty cool though. Where's my shirt!

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Seatpumper, where's all the content? I'll bet the stuff you deleted was more interesting; how 'bout you put it back up here! I'm sure your fans will applaud your open mind and tolerant attitude. All the best -Scooter

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Hey dude your page is cool. I can't remember the name of that burger joint that was a favorite of yours? Send me the name so I can forward some busness to them. Great stuff man. See you soon I hope.

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Seapum, you're the greatest!