Why do manufacturing companies lay people off? I thought I knew the answer to this question. I was surprised last night by a friend who provided an answer that I would not have guessed! Please give me your ONE and ONLY answer as to the most common reason. To add clarity, both hourly and salaried people have been laid off. In a somewhat likely ratio to the overall mix of the plant.Within twelve hours, I get 12 responses. More than a few of course match my thoughts (declining sales). A few suggest other possibilities that I have yet to encounter. That is one of the great things about the pool of talent on LinkedIn. Here is the "best of the best" in my not so humble opinion, from Frank Feather:
It is a swift cost-cutting measure which immediately saves cash flow, which thus helps the company weather the storm, which thus helps preserve the remaining jobs, and which thus helps the company recover and start re-hiring again.This explanation fits the other (limited) details that I have from the conversation with my friend. Anyone reading my blog for more than a couple of days will groan a small "Oh yea" under their breathe at the mention of cashflow. But the core problem goes unresolved. Eli Goldratt said that companies cannot be doing too many things wrong, or they would cease to exist. True enough. Normally. However, the economic climate is anything but normal! The Dow just staged its worst two-day sell-off in 21 years. So, Frank is probably right, this company is watching cashflow and Wall Street. When a fire alarm sounds in your hotel room, it is best to grab your Apple MacBook Air, and then if time permits, throw on some clothes and your shoes, then head down to the parking lot. Yet bigger problems remain for this company. Now, add the fact that maybe, just maybe (actually, I would almost guarantee it) a few extremely talented folks were just released into the wilds of unemployment. Few understand the true costs of replacing talented contributors. Sounds a little like saying my hand hurts, so I will shoot myself in the foot. That will take my mind off my pain. Wrong. -ski ---- Jeff 'SKI' Kinsey, Jonah email@example.com ©2008 Throughput.us LLC. All rights reserved.