Back to the future
What is going on within companies when they find their sales decreasing??? Some graphics, occurrences, and facts to explain what may be going on today. Layoff numbers . . .
Graphics taken from “intellizence.” Additional numeric can be found at the “intellizence” site. Click on the link in the company name.
There is a broader pattern to these layoffs to which case studies point to a broader pattern. Even outside of tech, companies have been cutting staff during periods of strong profit growth.
Industrial conglomerate 3M (fresh off a year of nearly $5.8 billion in profit for 2022) announced 2,500 layoffs in early 2023, citing a potential (the author used looming) sales slowdown.
- In retail, companies such as Walmart are quietly shedding workers in profitable years. (epi.org) and,
- In finance, several large banks have been quietly trimming their workforces through stealth layoffs and attrition, even as they remained profitable.
In many cases these cuts are done in small rounds or via performance reviews (dubbed “quiet layoffs”) to avoid public backlash. The overall picture is clear. Many firms are choosing to reduce headcount. This is not as a last resort. It is a proactive (and profits-driven) strategy. In multiple cases, announcements of layoffs and huge share buyback programs led to stock surges, underscoring the market’s reward for trimming labor costs.
One aspect coming out of layoffs? Approximately “87% of surviving workers said they were less likely to recommend their organization as a good place to work after witnessing how colleagues were treated.” That makes sense.
AB: In my experience as a planner or consultant, labor was the least of the problem. However, it is also the easiest to cut and to reduce costs. Look to other costs which are high cost such as inventory, throughput, and materials. These typically are higher in cost when measured against other items making up total cost.
“Why Are Companies Laying Off Workers While Making Record Profits, Monika Jus,” Medium