econscius

Firing Workers Can Be A Good Thing

In Uncategorized on May 23, 2012 at 5:13 pm

Yes, firing people is a good thing.  A very good thing sometimes.  Just ask President Obama when he touts the GM downsizing.

A troubled company in a declining or increasingly competitive industry may need to cut a bloated workforce to keep itself in business, saving the remaining workers.

Take GM. GM’s worldwide workforce declined by about 36,000 workers between December 31, 2008 and December 31, 2011. [1] [2]  The GM workforce declined by about 14,000 US workers during that time frame. [3]

 

[1] page 15 of http://www.sec.gov/Archives/edgar/data/1467858/000146785812000014/gm201110k.htm

[2] page 19 of http://www.sec.gov/Archives/edgar/data/40730/000119312509045144/d10k.htm

[3] The 2011 annual report states there were 77,000 US employees is 62% of the total [2].  The 2008 annual report states 62,000 employees were 68% of the total.  Dividing the 62,000 by 68% yields about 91,000.  91K minus 77K equal 14K.

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