In the continuing layoff season — sorry, earnings season — on Wall Street, we see more evidence of companies using the solution of laying off workers to meet budgets.
Citigroup lays off 9,000
The “We know how to manage risk” financial companies have Citigroup laying off 9,000 additional workers after posting a $5.11 billion first-quarter loss. Also $16 billion in write-downs associated with the credit crisis.
Citigroup has a new CEO and it looks like some of the poor management of the past is now finding its way to the cubicle in a big way. The layoff announcement is in addition to the 4,500 people laid off at Citigroup in the last quarter.
We know how to manage risk indeed…
AT&T announces management layoffs
Meanwhile, AT&T announced the layoffs of 4,600 people through a regulatory filing. Most of these layoffs, 1.5% of the workforce, will be management level employees. This, while in the process of hiring “more workers to support growth areas.”
This is lazy work. Instead of seeing what is happening in the business and working to move people to right positions within the company, the company instead chooses to lay people off. These workers that are hired in growth areas won’t need managers? There won’t be any attrition among the managers?
There are a lot of creative ways of keeping effective employees with the company and still meet the needs of business. The financial companies really blew the risk associated with their products and they and their employees are paying a dear price for their miscalculations. At company survival time, huge layoffs need to happen for survival.
But AT&T is simply taking the easy way by not figuring out how to use their workforce in the right places to match their business needs.
Both stocks are up as I write this, of course. Wall Street rewards ineffective management when layoffs are announced — it is a sign the company is doing something to help earnings…
Sobering thoughts for the weekend.