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layoffs?

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seankreynolds

Adventurer
Layoffs right before the holidays are quite commonplace, as is deciding to end indefinite-term contract employee's contracts (I've had both happen to me, for one). Nobody likes it, but companies don't lay off people before the holidays just to be mean; they do it because laying people off early the next year would be considerably more costly.

1) Ignoring the human cost of a decision merely for the sake of the numbers is shortsighted and irresponsible.

2) Just because everyone is doing it doesn't mean it's okay.

3) Changing their fiscal year to something other that Jan-Dec means that having these annual layoffs wouldn't happen 3 weeks before Christman.

Then again, smarter management and less slavish adherence to the numbers ("Oh no, we only made $8M when we predicted we'd make $10M, it's like we're losing money, let's lay off people!") would mean they wouldn't have to follow this layoff-contract-hire-layoff cycle. But hey, gotta protect the shareholders, right?
 

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mlund

First Post
Rather, IME at least, the difference between a contract and permanent position is that when offered a permanent position the employee should be able to reasonably expect that the company intends for that position to be required long-term, and that the position isn't a temporary one or one related to a specific (short-medium term) project. Unless, of course, the company and employee have agreed to a short-medium term position (which IMO, is really more akin to a contract worker).

In the United States, a Contractor is typically simply a worker who is not part of the Payroll of the company that uses his services.

They come in two basic types:

1099 Contractors are self-employed, handling the payroll taxes and withholdings that an employer would set aside for an employee. They have to budget for their own insurances, sick time, and vacations out-of-pocket but get to deduct business expenses related to earning their income.

W2 Contractors are employees of Agencies. The Agency handles their taxes and benefits and cuts their paychecks. The Agency bills the Company that needs the Contractor's services based on an agreed-upon contract between the two companies.

Employee-at-will
is the typically non-contractor status for workers at a company. They work at a company as long as the company wants them there. They are paid directly by the company and are part of their company's payroll - including taxes and benefits.

Most Employees-at-will who earn a Salary rather than an Hourly Rate are considered "permanent" employees since their salary is agreed upon on an annual rate. They can still be terminated at any time by their employer.

If the above is true, then (barring unforecast disaster), the position should exist as long as the employee is willing and capable of performing it... and speaking for myself, I'd certainly do a bit of research to ensure that the company was planning growth and could reasonably support the position it was offering me long-term.
The moment someone else (or something else) comes along who can perform your tasks more ably or at the same level of ability (and I include trustworthiness and experience as relevant components in my definition of ability) but for less money the company should make plans to move you to a different job or lay you off. That's how competition and innovation work. It cuts both ways too - plenty of managers find their way out the door due to HR and Accounting specialist firms out-competing in-house departments. Advances in software have eliminated a lot of middle-managers from various fields over the years, just as machines have reduced the ratio of laborers-to-products in industrial work.

So yes, I guess I would go into that position expecting to hold the position as long as I was willing and capable of doing it, as I expect most people in a similar position would.
I don't have that expectation. I try and approach each day as if I'm trying to get hired anew rather than just serving time in a position that "belongs" to me. Jobs don't "belong" to employees, just like customers don't "belong" to businesses.

Thanks for all the kind words and thoughts. Personally, I'm in good shape financially and emotionally. Wizards has offered me a generous severance package, things are in good shape on the home front, and work hasn't exactly been wine and roses for me lately. No one needs to worry about me.

I'm glad to hear this, Mr. Tweet. Thanks for all your outstanding contributions to our games. I look forward to seeing what you come up with next!

- Marty Lund
 
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Then again, smarter management and less slavish adherence to the numbers ("Oh no, we only made $8M when we predicted we'd make $10M, it's like we're losing money, let's lay off people!")
Well, if they could have invested the capital elsewhere and made more than $8 million, it is like they're losing money.

Changing their fiscal year to something other that Jan-Dec means that having these annual layoffs wouldn't happen 3 weeks before Christman.
I don't think that has much to do with it. If they're just trying to reduce costs to make the year-end numbers look better, they wouldn't do it with so little time left in the fiscal year. If you have a December 31 year-end, and you lay people off just before Christmas, that's not going to help your bottom line, especially when you consider the severance.
 

mlund

First Post
I don't think that has much to do with it. If they're just trying to reduce costs to make the year-end numbers look better, they wouldn't do it with so little time left in the fiscal year. If you have a December 31 year-end, and you lay people off just before Christmas, that's not going to help your bottom line, especially when you consider the severance.

Indeed. Rather, you'd be better served by keeping the footprint the severance package leaves on your financial statements off the books for the next fiscal year. Coming up short in 2008 is a problem. Not having a good financial projection for 2009, however, compounds the problem immensely. Publicly traded companies have a lot riding on their annual fiscal reports. A poorly designed fiscal report can cause massive short-term capital losses for your shareholders just due to stock prices. Shareholders (especially Income and Fix-Income investors) hate massive short-term screw-ups in stock prices.

- Marty Lund
 

gribble

Explorer
The moment someone else (or something else) comes along who can perform your tasks more ably or at the same level of ability (and I include trustworthiness and experience as relevant components in my definition of ability) but for less money the company should make plans to move you to a different job or lay you off.
I agree 100%. I didn't think this needed to be stated. I certainly wouldn't be going into a position thinking there was someone else who could do the job better than I could, and if it was later brought to my attention that someone else could do my job better than I could, I wouldn't be willing to try and keep it - I'd be finding something (inside the company or elsewhere) more suited to my talents.

I try and approach each day as if I'm trying to get hired anew rather than just serving time in a position that "belongs" to me.
As do I. Frankly, as far as I'm concerned anyone just "serving time" isn't really willing or capable of doing their job anymore, as I can't think of many (if any) jobs where it's a core requirement of the position...

Again, I didn't think it needed to be stated that striving to do the best job you can and being passionate about what you're doing were prerequisites for being considered capable in your job.
 

seankreynolds

Adventurer
I don't think that has much to do with it. If they're just trying to reduce costs to make the year-end numbers look better, they wouldn't do it with so little time left in the fiscal year. If you have a December 31 year-end, and you lay people off just before Christmas, that's not going to help your bottom line, especially when you consider the severance.

So we're in agreement that the timing is poor, as well as stupid. ;)
 


Scribble

First Post
3) Changing their fiscal year to something other that Jan-Dec means that having these annual layoffs wouldn't happen 3 weeks before Christman.

That would be kind of tough to do though. Aren't the pretty much universal accounting quarters? Wouldn't that mean all businesses would then have to change to account for Christmas?

Layoffs suck, and I agree it's a crappy way to make the numbers work, but I'm not sure changing the fiscal quarters would be all that easy...
 

Zil

Explorer
Well, if they could have invested the capital elsewhere and made more than $8 million, it is like they're losing money.
Ah, those opportunity costs. Note though that these are not real costs. The really important thing to look at is the ROI. If you meet an acceptable return on investment, you really should be fine.

If you are talking shifting capital elsewhere, you need to look at the cost of closing down whatever projects/product lines/plants you are shifting the capital away from.

You also should be considering what you are doing towards longer term profitability, but sadly the business world often does not look all that far into the future, especially if the main concern is maximizing short term shareholder profit (or manipulation of share prices which has been the downfall of a number of companies over the past decade).

I don't think that has much to do with it. If they're just trying to reduce costs to make the year-end numbers look better, they wouldn't do it with so little time left in the fiscal year. If you have a December 31 year-end, and you lay people off just before Christmas, that's not going to help your bottom line, especially when you consider the severance.

When your fiscal year ends and begins and ends has a huge impact on all manner of decisions in any large corporate or government organization. You see all sorts of things ending at fiscal year end including employee terms, projects, etc. You also see very interesting spending patterns that are directly related to where you are in the year cycle.

In my organization, we typically have a spending flurry in January and February and then things get extremely tight from March through June. This is directly related to our fiscal year and the associated budgeting process. Contracts and projects almost always end March 31st. Our FY runs April through March. The cycle repeats itself over and over again at the same times, year after year.
 

That would be kind of tough to do though. Aren't the pretty much universal accounting quarters? Wouldn't that mean all businesses would then have to change to account for Christmas?

Layoffs suck, and I agree it's a crappy way to make the numbers work, but I'm not sure changing the fiscal quarters would be all that easy...
I think most public companies have a March, June, September or December year-end, so their quarters align. But there's no rule dictating when the year-end will be. Picking one at random, Hewlett Packard has an October year-end.

Edit: Though actually changing your year-end once it's established can be difficult. In Canada at least, the tax authority has to approve it (and you need business reasons to do so, not just "I want to change it"), and presumably securities regulators would have to approve as well.
 

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