Monday, April 25, 2016

Why People are Layoff while companies are making Billions ?

 What was thought in school that make the system so wrong? Life of million of people are affected by the idea that every quarter the profit should increase. Who invented this model? This model is thought in Management School. 

The Paradigm should change to have a better world.

Even when the economy is healthy, companies lay off hundreds of thousands of people a week, and up to 1 million a month. The problem: they still see workers as an obstacle to higher profits.

IBM will reportedly announce this week the largest corporate layoff ever, at a reported 118,000 jobs. If it does, it is hardly the first time IBM or any other big company will have sacrificed its workers to appease the gods of Wall Street. 

At American Express, spending by the company’s cardmembers is growing, and so are revenues and profits. But not payroll: 

American Express just surprised financial markets by announcing plans to slash 4,000 jobs, cutting the number of employees by 6%.
At eBay, the planned job cuts, announced days ago, total 7% of the workforce, or 2,400 individuals, and come despite a 9% jump in profits and a 12% increase in revenues.

January is the worst month of the year for layoffs, and an increase in layoffs would be very normal after the kind of seasonal uptick in hiring that we tend to see in the fourth quarter.

Even when things are normal, employers still lay off a total of about 300,000 people every week, or 1.2 million people every month. It’s a staggeringly large number.

Consider American Express. From a distance, one would say this is a company that is doing just fine. Its profits for the fourth quarter rose to $1.45bn from $1.31 bn and beat analysts’ forecasts.
The problem? Amex had promised its investors that revenue would grow 8%, and it grew only 6.6%. Management knew investors would be worried and irritable. 

Who are those irritable investors? There are people behind it?
What can be done to change the system?

TD, Canada’s biggest lender by assets, started the process by hiring Boston Consulting Group to examine ways to drive efficiency, the sources said.

Following the review, TD informed employees of the job cuts last week and this week, with a further wave of job losses expected next week, they added.

Although they're still pulling in billions in profits, TD and other big banks are trying to protect their bottom line in a slow growth economy.
TD hikes dividend as profit tops $2B
Top down cuts
They're starting at the top and kind of working their way down. What I don't know is at what level they would stop," said an employee. 
"There's probably, I'm assuming, an expense number that they're trying to get to.

Fees up, jobs down

Many of the big banks are hiking some customer service fees and TD's layoffs come on the heels of a trio of other job cut announcements at banks.