When I first wrote the book, “The One Hour Survival Guide for the Downsized” more than a year ago, I truly believed that downsizing by this time would, be passé. I thought I had missed the market. A good book….. just a little late. Boy, was I wrong. As the title implies, the beat does go on.
Some of the latest figures out of Washington are starting to show unemployment numbers turning downward. However, is unemployment truly heading downward, or is this just a brief soft spot (Greenspan didn’t patent this description) in a longer period of employees’ nightmares?
To get an answer to this question I studied the most recent interview with Ann Mulcahy, Chairman & CEO of Xerox Corporation. A person who is reflective of the CEO community, her words gave me confirmation of what I already knew; my book has legs. But first, let’s see what she had to say. Ms. Mulcahy was asked, “How do you explain to investors that sales can fall, but profits come up?” Her response, “it was incumbent on the management to take care of things before we scaled the company to grow again.” Did she answer the question? Of course, but it was in CEO ease. What she should have said was that we can keep growing profits even though we don’t sell product, as long as we keep downsizing people. I guess she did say that, but she inserted the word “scale” instead of “downsizing”. It would appear the word downsizing may be replaced by the phrase “scaled down”.
All across America, the fat, the meat, and now even the bone is being cut so that “the company is sized right.” I’ve often said that if a company gets to the point of cutting the bone, they’re in danger of putting themselves out of business. However, Kodak, another Rochester company, recently announced several hundred jobs being shipped to China and Mexico. Obviously, this is a much cheaper bone. To be fair to Ms. Mulcahy, every CEO in America has high expectations for their company, and a business plan to help them achieve those expectations. However, in this terrorist impacted, interest rate guided, consumer driven economy, if sales don’t meet those expectations, there is only one strategy left to keep increasing earnings. Companies must continue downsizing, or scaling down. Take your choice of semantics.
Just when employees thought it was safe to come out of their foxholes, Ms. Mulcahy and others announced “when you’re not really delivering to those expectations, than all bets are off”. Sales are the big question mark as we go into the new year. Will corporations start to spend? Will the consumer continue to dig a hole of indebtedness? Will the worldwide deflationary bear finally show its claws on US shores? The questions hopefully will be answered in such a way that CEOs will feel that downsizing as a corporate strategy is history. Unfortunately I fear, the strategy, like my book, will have legs and CEOs like Ms. Mulcahy will still have to “clear a lot of baggage”…and the beat goes on.
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