James Siminoff

10% is not becuase of the economy…

I was talking to a very successful business owner today who said that even his company was laying off 10% of its staff due to the bad economy.  My comment back to him was, are you really laying off 10% because of the economy… or is the thought of a bad economy vs. the “free money times” we just came out of forcing you to make the tough decision to get rid of nice people but whom are really just dead weight.  The more I pushed the more the answer became that the people leaving should have never really been in the jobs they had in the first place.

We have seen a lot of announcements of downsizing due to the economy in all industries lately.  Most are saying that the companies are cutting 10%-15%.  Well I am now calling “bullshit” to the majority (there are always exceptions) of companies that are downsizing to prepare for a worse economy.

One of the hardest and worst things of running a business is letting people go.  Because typically even if someone is not good at their job or where the position is just no longer needed they are probably decent people with responsibilities and by laying them off you know that they are going to be negatively effected.

But if you want to take the role and responsibilities of CEO, Founder, etc., then I believe that it is your duty and obligation to your employees, customers and investors to not allow your business to be run as a charity.  That means constantly making tough decisions that are in the best interest of the companies long term viability.

In fact by running your business correctly there is typically a positive side effect from trimming your staff.  A company that goes from 100 people to 90 people (assuming that you are letting go of the bottom 10%) will typically get more done and be able to do more business with 90 then it could with 100.  Additionally just because someone is not preforming well at their job does not make them bad, a lot of times is because the job was not a good fit.  I have let go a lot of people that were doing a “less then adequate” job for my company and go on to do great things somewhere else.

Please don’t mistake this post as if I am for people losing their jobs, I am not and my sympathies go out to everyone effected by this economic downturn.  However I think that at some point, someone had to call “bullshit” on the CEO’s/business owners/investors/etc. that are using the economy as an excuse to do something that they should of been handling all along the way.

• The first jobs to go
• Time Inc. Laying Off 600 [Breaking]
• Record Layoffs Leave Workers Desperate
• Remember when we were all laid off? Oh, right, you’re 25 [Flashback]
• While the Economy Struggles, Profits Can Be Made