Monday, February 9, 2009

People or Profit???

Okay...this is an issue that is the bane of my existence. One that my friends know better than to get me started on because I can get all nutty about it...even though they agree with me on it.

I quite well understand that the sole duty of a business is to do one thing...Make A Profit. People do not go into business just for giggles and hope they lose their shirt. Those that have the gumption to invest their own money or find investors willing to take a risk deserve to make a profit...especially if the company makes or sells a product people want. That is their right.

Where I diverge from that idea is that profit is more important than people. This is a "Chicken or the Egg" issue here, I know. However I strongly take the position that people are more important than profit. This is especially true in times like these where hundreds of thousands lose their jobs each month. While my thoughts might be harder for some of the mom & pop businesses to hold to, corporations are not immune from this argument.

Take Microsoft for example. They laid off 5,000 workers because their profit margin was off by $0.02 per share. Two frackin pennies!!! So because you miss the target by the slimmest of margins you have to give the axe to 5,000 people??? Correct me if I am wrong, but in this down economy Microsoft still MADE A FRACKIN PROFIT!!! Does it really matter if Wall Street does not like that you did not make as much money this year as you did last year??? Sure the stock may take a small hit...but show me a stock that is not regardless of this economy. The bottom line is 5,000 people now have to find a way to make their ends meet...and in this economy (thank you El Presidente Arbusto) that is going to be a damn near impossible task. More companies are laying people off, not hiring.

I honestly cannot believe that a company making a profit can justify laying off people. Not when people are the thing that make the company work. Here is where the Chicken and Egg thing comes in. Yes, to start a company and keep it running you need to make money...but in order to make that money businesses need workers. If you do not have people to make the product or to sell the product than all the money in the world does the business no good. You have to have people to make the product. You also have to have people to buy the product. To buy the product the people need jobs. So doesn't it seem silly to lay off people to ensure you make more profit, but at the same time ensure that that many more people are significantly less likely to be able to buy the product??? While Microsoft may not be the best example of what I am getting at (they missed their target based on B2B sales...not because XBox was not profitable (which it was). However take Hasbro...the toy maker had layoffs late last year. Now you tell me that those people were able to make sure that their kids had a Merry Frackin Christmas when mommy and daddy could not afford to buy the toys their employer once paid them to make? I highly doubt that was the case. If they do not have an income how can they afford to buy things for the holiday...or for that matter pay other bills.

Making a profit is important to businesses. However at what point does making the profit overcome the importance of the people who have to buy the product for you to make the profit???

Which brings me to the other half of this argument. When companies lay off people, especially ones that make a profit but make cuts because the profit was not big enough, they shoot themselves in the foot and the rest of the country in the gut. If people have no income, and in this economy cannot find a new job, how can they be expected to pay their their mortgages??? Yes...the financial mess is due to idiots on Wall Street over reaching for the last dollar by making bad loans, but not everyone who defaults or falls behind on their mortgage is a bad risk. John and Jane Six Pack who made a decent living until they were laid off are as much a reason why the banking sector is such a mess as the morons who steered that car into the ditch in the first place. Companies that lay off workers despite making a profit only seek to pull that car further into the ditch to the point that no tow truck could pull it out. That makes for this whole thing to become a vicious cycle that we will have a hell of a time getting out of as a nation. If we as a people do not express outrage at people like Steve Ballmer of Microsoft for making his decision, we are as complicit in things as he is. We need to voice ourselves and tell the fat cats that as long as you are still making a profit, layoffs are not an option.

As a side note, I doubt that Bill Gates would have made the decision to lay off the people given the situation in this country being what it is. From what I know about him, he is business savvy but would have told Wall Street to go to hell for demanding a sacrifice of 5,000 people to keep the stock from dropping a little bit.

BTW...I am not going to trash all companies in this rant. Oreck is a prime example of companies that understand the principle I am getting at. After Hurricane Katrina their only plant in Louisiana was wrecked. Rather than lay off workers until they were back up and running they kept everyone on payroll and paid them until the plant and office were up again. On top of that they were giving away their vacuums to people who were cleaning up their homes after the storm. Now that is a company we should all be getting behind.

So I ask you the reader...what is more important in this world...the profit or the people???

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