GLOUCESTER CITY, NJ --Less than a year ago, almost every business had signs out front that said "Now Hiring." Employers were begging for additional employees. In less than a year the workforce has gone from businesses needing employees to businesses laying off employees - by the thousands. What happened?
Some of these companies, such as IBM have been around for a century or more. Others, like Spotify, are the new kids on the block. Yet, they are facing the same problems. First, let's look at some of the companies which are downsizing.
In total, there are 78,250 jobs gone, almost overnight, including only those businesses big enough to make the news. There are hundreds of other, smaller businesses that just didn't make the list.
What does this mean and why is it happening? Despite President Joe Biden telling the public how well the country's economy is doing, anyone who goes grocery shopping knows that just is not true. We are in a recession. Just because the government changed the definition of recession doesn't help the average family make ends meet.
How did this happen? It was only a matter of time before the big tech companies had to downsize. The owners of these companies had the ability to wine and dine those people who had the money to invest in them but they didn't know the difference between managing and showing off. Facebook, Google, and Twitter, just to name a few, hired their interns straight out of college at $100,000. Interns are there to learn, they are not expected to produce much until the end of their internship. One tech company laid off 6 massage therapists. Imagine being paid to have a massage during work hours? When Elon Musk bought Twitter he saved $4 million a year by cancelling free lunches for the employees who were working from home. The absurdities go on and on.
Managers from decades ago had a totally different outlook about their companies. Alfred Sloan, one-time President of General Motors said "What's good for GM is good for America." Lee Iacocca, who was responsible for the success of the Ford Mustang also had a few words of wisdom for both managers and employees. He said that any company's budget can be cut by 10% and no one would notice. Also, companies could lay off 10% of their employees without affecting production.
The question which hasn't been addressed is where will the $100,000 interns go for new jobs where they can get massages on company time and free lunches?
Maybe these principles of management aren't outdated.