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Job Cuts For Dell, Motorola, and Circuit City
maeveth writes "Talk about not a good time to be working in the tech sector. Layoffs all over the industry have been announced, in a variety of different areas. Last week Dell announced they were partnering with Wal-Mart; this week they are planning a ten-percent reduction in their global workforce. Motorola was already going to cut some 3500 jobs by the end of June; they're now adding another 4000 pink slips to that number (and hoping that next month's RAZR2 launch will boost profits). To top it all off Circuit City is acting in a decidedly schizophrenic manner. The are going to axe about 850 employees, on top of the 70 stores they closed last month ... while also planning to open 165 new stores."
One of these things is not like the others.
There are no karma whores, only moderation johns
Meanwhile, every tech place I know can't hire fast enough. The good candidates are getting soaked up by the market fast. Wasn't there a stat recently that computer people are in higher demand than during the tech boom? But maybe its just a localized phenomena where I live.
What's so strange about closing 70 locations and opening 165? Anyone that has had anything to do with corporate retail planning can see that it can make perfect sense: The company wants to grow, so they add more stores, at the same time, some stores have been performing so badly that they think the location will never be profitable enough, so they are closed.
The only surprising part is that we are talking about all that many stores at the same time: It either means that the former management was ignoring all the indicators, or that the new management has just gone overboard to make a point.
Either way, it's something that seems perfectly healthy for a retail chain to do.
FTFA:
"This time around, the company [Circuit City] axed roughly one manager from each of its 654 stores along with nearly 200 positions at its Richmond, VA headquarters."
How does sacking a bunch of retail managers and back office support staff spell doom for tech sector employees? I understand that job cuts are bad things, but I don't think this one should be lumped in with the tech sector.
[sig]you really dont want the answers, trust me[/sig]
The submission suggests the decision to open new stores while closing others is weird... but it is not.
BGI (Borders, Waldenbooks, Brentanos, Paperchse) announced they would be closing/spinning off all international operations a day before they announced the opening of several new international stores. The intertia behind the construction, planning, hiring, etc was too great to halt. Additionally, the purchasing departments negotiate deals based on volume and there was *years* of planning/analysis/spending that affected the entire chain and would need to be revisited if the stores did not open as planned.
The damage to the company would have been greatly compounded if the new stores had not opened.
Finally, while closing locations is common practice for companies that are in difficult times, it is not unusual to continue expanding in markets that show more promise than the failing ones that were cut. Shoring up existing markets does less to placate edgy shareholders than showing aggressive pursuit of new opportunities.
Regards.
During growth cycles in the stock markets, like the record-breaking S&P 500, it's very typical for companies to shed employees. It has nothing to do with Tech as an industry segment, has nothing to do with outsourcing, has nothing to do with EducationInAmericaToday, has nothing to do with anything but pleasing Wall Street. This allows stockholders to fatten up the stock price, lower DE ratios, and at the end of the day, inject new blood.
Does it suck? Of course it does. Wall Street is a nasty bitch.
---- Teach Peace. It's Cheaper Than War.
At first, it was a great part time job for a guy working his way through college. Commission based computer sales, and the commission was more than fair. Then around late 2000 there was a huge shift.
First of all, our store's management staff was almost entirely changed no less than 9 times in 7 months. That's the store manager, assistant manager, and all the department managers. The only role that was relatively "safe" was the AV manager, who got demoted to a sales guy when they brought in someone else, then got promoted again after 3 guys went through that manager role.
Commissions were first cut, then to compound the problem they started flooding the sales floor. Where you used to only have maybe 2 guys in a department during the day and 3-4 at night (depending on the time of year and the department), it became literally 5 during the day and 8 at night. No one was making money on commission anymore, we were just drawing the minimum hourly pay.
Ironically, I think that last move is what really started the store's sales going downhill - no one wants to feel like there's 8 sharks circling for blood/a sale while they're looking at a printer or whatever. Even if the salespeople aren't trying to do so, with 8 of them in a small department, you can't really avoid that feeling.
From one of our assistant managers, I heard that there was some huge politics going on in the regional level in the company. Exactly what, he didn't have details on, but most of the Northeast was going through similar issues (although our store was the worst example he heard of).
Really, I think the problem is that Circuit City hasn't been aggressive enough in its adaptation to new marketplace conditions. It settled for "good enough" for too long, and lost it's momentum.
Disclaimer: I don't hold anything against them, like I said, it was a nice place to work for a while. And at least their problems stemmed from poor organizational practices rather than a crappy attitude toward the consumer. Customer service was at least given more than lip service while I worked there. Granted, it's been 5 years, so things may have changed there too, I'm not sure.
"decidedly schizophrenic manner"
Schizophrenia != Split Personality
Bad times? What are you smoking.
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Here is today's article from NY Times Dell Reports Better-Than-Expected Profit http://www.nytimes.com/2007/06/01/technology/01de
The reason these people are laid off is because the companies want even more profits, not because they are losing money during "bad times."
Obama likes poor people so much, he wants to make more of them.
Dude! You're getting a pink slip.
Dell inaugurated Thursday a new research and development (R&D) facility in Bangalore, India, that can house up to 1,000 staff. The new facility is in line with Dell's plans to make India a hub for the development of enterprise products such as servers, storage, and software. Coincidence? Surely not.