Corporate America

[meresal]

I work for a large bank and expected that they would do more layoffs at the beginning of this year... So, yesterday when we received an email from our CEO stating that they would be doing merit raises this April, for the first time in 2 years, I was pleasantly surprised/shocked, especially since we are projected to be almost 30 million below projections for YE 2009.

Well, today we received a follow-up email stating that to attain our "goals" of an improved business model for 2010, which he initially spoke about it in yesterday's email, they will be letting go of 2300 employees as well.


Seriously?

Anybody want to take a stab at this rationalization... cause I've got no clue?

 

[rierie26]

So...they are laying people off in order to make their projected goals so that they can give the remaining, not-laid off people raises? Is that what I''m seeing?

 

[meresal]

Date: 1/7/2010 3:07:00 PM
Author: Kitcha
So...they are laying people off in order to make their projected goals so that they can give the remaining, not-laid off people raises? Is that what I''m seeing?

Yes.

 

[y2kitty]

So you all got to be really happy (raises) for 1 day and now you are back to fearful (layoffs). WTF corporate America?

 

[Erin]

If times are that tough that you need to be laying people off, nobody deserves a raise, much less a bonus. We layed off many employees last year and I was privy to our executives'' bonuses and I was internally angry and disgusted. Not to sound like a democrat who thinks everyone should be equal, but seriously those people at the top don''t NEED more money. Our business didn''t perform well so why do you get rewarded? This bonus also is partially available because of the cut wages from our labor staff - which by the way Mr. Executives, are real people with real families who need to pay real mortgages on their homes that need real heat. What are they supposed to do?

Sometimes the best way for your business to stay afloat is to reduce labor. Hey, do what you have to do. I get that. But if while holding that ax you use your other hand to vote thousands of dollars in your pocket, then I hope you have a hard time looking in the mirror because I have a hard time looking at your face.

 

[movie zombie]

lay off workers in order to pay those bonuses?

mz

 

[Erin]

I'm not saying that's why it happened. For all I know their bonuses were factored into the budget before the layoffs or alongside them. I'm not saying it was a quid pro quo situation. I am saying it's hard to understand how the money was available for one and not the other which is what I'm struggling with in Mersal's situation.

 

[Mara]

merit increases should technically be for those deserving of merit...and personally i think that companies should not nix them even in tougher times. if someone is over-performing they should be rewarded in SOME way. not sure how your company is planning to do the merit increases and it's certainly not always equal. but in an ideal world, they are trimming the fat and rewarding those over-performing.

how big is your company?

 

[meresal]

Date: 1/7/2010 4:13:22 PM
Author: Mara
merit increases should technically be for those deserving of merit...and personally i think that companies should not nix them even in tougher times. if someone is over-performing they should be rewarded in SOME way. not sure how your company is planning to do the merit increases and it''s certainly not always equal. but in an ideal world, they are trimming the fat and rewarding those over-performing.

how big is your company?

Tens of thousands in over 20 countries. (Well, there were. I think we have probably laid off around 8k so far.They did 3% of the workforce alone, last Fall 200

This will be our 5th wave of layoffs since March 2008. They have been consistantly doing 2 per year since then. One in the early spring and one around September.

 

[cellososweet]

I love banking. My husband is in wealth management and we''ve had this conversation so many times. We don''t get how some people who are high up get bonuses that are large enough to pay two lower employees salaries, yet they "need" to do layoffs multiple times a year. It drives us nuts, though we''re grateful that he''s at least still employed.

 

[purrfectpear]

I work for a corporation with more than 120K employees. Over the last 20 years it has gone through several layoff periods. We still had a salary adjustment pool every year. Of course in leaner years the pool was smaller. In most cases the initial layoff wave were employees that were redundant anyway. Only once did I see layoffs continue to the point where valued employees were laid off. Senior executives still took massive payouts.

We''ve been "right sized" now so that most of us are doing the work of 3 employees anyway. They can''t really lay anyone off now unless business falls far below current levels.

 

[tlh]

Date: 1/7/2010 3:11:32 PM
Author: y2kitty
So you all got to be really happy (raises) for 1 day and now you are back to fearful (layoffs). WTF corporate America?

That''s seriously messed up.

 

[packrat]

Oh boy. It makes a person angry doesn''t it?

We have issues with it too-JD hasn''t had a raise in 2 years and the company is screeching and gnashing their teeth about how "everyone needs to understand the company didn''t make any money" blah blah friddidy blah..but yet, the CEO etc, of the company continue to make their million dollar salaries, PLUS bonuses, PLUS stocks, etc etc. It''s maddening! (Oh, AND they holler b/c they "pay their employees TOO much" bwahahaha-they pay them a shade more than minimum wage)

 

[radiantquest]

Meresal-Are you confident that your position will remain? I really hope so.

 

[meresal]

Date: 1/7/2010 8:03:22 PM
Author: radiantquest
Meresal-Are you confident that your position will remain? I really hope so.

I would hope so. We just found out at the end of the year (ie, Dec 30th) that our office was approved to fill a new position... so I would assume if they are letting us hire someone else, then they would not be looking to get rid of someone at the same time. But, who knows?

So, that makes the whole thing even more mind boggling. Hiring people, laying off people, and giving raises all at the same time

I go on Maternity Leave at the end of April, so what would really be difficult is if I were to get the news while I''m out. I have made it this long, refering to the 5 waves of layoffs prior, so I''ll just keep my fingers crossed.

 

[IdLikeToBuyAVal]

Execs'' attitudes can certainly shock sometimes. I worked for a smallish company (250 people) a few years ago that filed for bankruptcy and when the local news interviewed the (former) CEO, he said the employees left without jobs had it much easier than him. We could all go out and get new jobs but he had to stay and "clean up this mess." You know, the mess we got into because he was paying himself wayyyy too much and bankrupted the company.

 

[meresal]

Date: 1/7/2010 11:21:57 PM
Author: IdLikeToBuyAVal
Execs'' attitudes can certainly shock sometimes. I worked for a smallish company (250 people) a few years ago that filed for bankruptcy and when the local news interviewed the (former) CEO, he said the employees left without jobs had it much easier than him. We could all go out and get new jobs but he had to stay and ''clean up this mess.'' You know, the mess we got into because he was paying himself wayyyy too much and bankrupted the company.

We get the quarterly emails saying that things are "looking up" and that everyone is doing a great job, but everyone knows that they will do more layoffs.

I just don''t get why they think lying is a better option than being truthful? I guess maybe that is something you learn on the way "Up"?

 

[AGBF]

Date: 1/7/2010 4:19:18 PM
Author: meresal

This will be our 5th wave of layoffs since March 2008. They have been consistantly doing 2 per year since then. One in the early spring and one around September.

Well, as cellososweet so eloquently put it, "I love banks". My husband is a career banker and he has been laid off by the very best of banks! Once he was laid off with 5,000 other people from Citibank. Once he was laid off from a private Wall Street bank. It is always interesting once those rumors start flying around. I am not sorry that my husband is now happily settled at the Federal Reserve Board. We still have to worry about whether some Senator decides to do away with his function at the Fed. and whether his job will be eliminated when they reorganize, but somehow the drama is not on the same level. At least so far it hasn't been. I wish you continued good luck with your job, meresal!

AGBF

 

[lucyandroger]

Date: 1/8/2010 10:27:15 AM
Author: meresal

Date: 1/7/2010 11:21:57 PM
Author: IdLikeToBuyAVal
Execs' attitudes can certainly shock sometimes. I worked for a smallish company (250 people) a few years ago that filed for bankruptcy and when the local news interviewed the (former) CEO, he said the employees left without jobs had it much easier than him. We could all go out and get new jobs but he had to stay and 'clean up this mess.' You know, the mess we got into because he was paying himself wayyyy too much and bankrupted the company.

We get the quarterly emails saying that things are 'looking up' and that everyone is doing a great job, but everyone knows that they will do more layoffs.

I just don't get why they think lying is a better option than being truthful? I guess maybe that is something you learn on the way 'Up'?

A lot of that going on around me as well. My company uses the term "transitioned out" instead of layoff as if that fools anyone or makes anybody feel better about the situation

My only guess about the raises/ bonuses along with layoffs is this: Layoffs really hurt morale. People start to feel like "why bother? They're just going to get rid of me anyway" and I don't have to tell you about the stress of knowing they could come at any time. So my guess is that they think giving raises/ bonuses to those that remain will somehow counteract that morale drop and make them work harder to make up for the people that were let go.

ETA - Don't forget when they layoff people they save a lot of money on health insurance and other benefits besides the salaries so if they've done a lot of layoffs the raises probably don't reach the amount they're saving by letting the other people go.

 

[AGBF]

Date: 1/7/2010 11:06:19 PM
Author: meresal

I go on Maternity Leave at the end of April, so what would really be difficult is if I were to get the news while I''m out. I have made it this long, refering to the 5 waves of layoffs prior, so I''ll just keep my fingers crossed.

I suspect that your bank will be unable to give you such news legally. I think your pregnancy will afford you legal protection. I doubt they want to be sued for violating your right to have a baby (i.e. to be a woman)!

AGBF

 

[Hudson_Hawk]

Date: 1/7/2010 11:06:19 PM
Author: meresal

Date: 1/7/2010 8:03:22 PM

Author: radiantquest

Meresal-Are you confident that your position will remain? I really hope so.

I would hope so. We just found out at the end of the year (ie, Dec 30th) that our office was approved to fill a new position... so I would assume if they are letting us hire someone else, then they would not be looking to get rid of someone at the same time. But, who knows?


So, that makes the whole thing even more mind boggling. Hiring people, laying off people, and giving raises all at the same time

I go on Maternity Leave at the end of April, so what would really be difficult is if I were to get the news while I''m out. I have made it this long, refering to the 5 waves of layoffs prior, so I''ll just keep my fingers crossed.

Mer, your maternity leave is protected, they can''t lay you off while you''re out and they have to have a comparable position waiting for you when you get back.

 

[meresal]

AGBF and HH, I'll check my documents again, but I'm not sure that holds true for layoffs. Give me a minute to hunt...

 

[Hudson_Hawk]

FMLA requires that they have a position available for you after your 12 weeks. It doesn''t have to be your current position, but it has to be a job at the same level and pay grade.

 

[lucyandroger]

Date: 1/8/2010 10:50:58 AM
Author: meresal

AGBF and HH, I'll check my documents again, but I'm not sure that holds true for layoffs. Give me a minute to hunt...

Mer, You are correct. If there were a general layoff, unfortunately you would not be immune just because you are on maternity leave.

ETA - HH, that is true in that they can't just get rid of you when you try to come back. However, if there is a general layoff of multiple employees and you would have been laid off if you were still at work during that time, then they could lay you off. The FMLA does not give an employee additional rights to employment that they wouldn't have had if they were continuously employed during that period.

 

[meresal]

Date: 1/8/2010 10:56:09 AM
Author: Hudson_Hawk
FMLA requires that they have a position available for you after your 12 weeks. It doesn't have to be your current position, but it has to be a job at the same level and pay grade.

I just re-read thru the packet and it said my company provides job protection for up to 20 weeks. I could have sworn that I read somewhere that only applied to firings though, and layoffs were different. I must be making things up...

ETA: Lucy- Thank you for the post. I knew I read that somewhere. It definitely makes sense, since layoffs are generally Corporate driven and not local decisions.

 

[Hudson_Hawk]

Well I''d save that packet so if it happens you can argue it based on that blurb.

 

[MustangGal]

Unfortunatly, FMLA will not protect you if your position was subject to layoff while you were out. Most companies try to stay away from it, just to be safe, but I''ve seen it happen both at my old job, and at my new job.

I hope it all gets "cleaned up" before the baby arrives, and you don''t have to worry about it!

 

[janinegirly]

This is standard business in most corporations. Layoffs are one quick way to increase the bottom line (cutting expenses), and also utilized to trim the fat (too many people doing overlapping or unnecessary functions). It''s cruel and the least creative approach, but it really is a part of the cycle. Bonuses are not necessarily related. Bonuses/raises are merit driven ..um for the most part, but also given to retain talent. This is why the top guys always get huge bonuses. I''m not saying this is a great system and I get annoyed at multi million packages for guys who did little or nothing too, but that''s how the system works, and by system, I mean free markets.

Corporations are also not democracies, so you see alot of things you have to "take" even if it''s not fair. But you always have the option to work somewhere else! The thing I see that is the most irritating is when some new hot shot comes in and cuts heads and inevitably cuts someone who has been there 20+ years (ie knew alot) and at a low end salary. Then they realize no one knows how to do that person''s function, so they scramble and make a lot of mistakes in the process. Then they go out and hire someone new to replace original position with someone who knows less and costs more!

I''ve seen it all though, and pretty immune now.

 

[meresal]

Date: 1/8/2010 1:46:59 PM
Author: janinegirly
This is standard business in most corporations. Layoffs are one quick way to increase the bottom line (cutting expenses), and also utilized to trim the fat (too many people doing overlapping or unnecessary functions). It's cruel and the least creative approach, but it really is a part of the cycle. Bonuses are not necessarily related. Bonuses/raises are merit driven ..um for the most part, but also given to retain talent. This is why the top guys always get huge bonuses. I'm not saying this is a great system and I get annoyed at multi million packages for guys who did little or nothing too, but that's how the system works, and by system, I mean free markets.

Corporations are also not democracies, so you see alot of things you have to 'take' even if it's not fair. But you always have the option to work somewhere else! The thing I see that is the most irritating is when some new hot shot comes in and cuts heads and inevitably cuts someone who has been there 20+ years (ie knew alot) and at a low end salary. Then they realize no one knows how to do that person's function, so they scramble and make a lot of mistakes in the process. Then they go out and hire someone new to replace original position with someone who knows less and costs more!

I've seen it all though, and pretty immune now.

I definitely understand what layoffs are used for. Since I have been here a few years and see that people are fed up with not even receiving annual cost of living increases for the last 2 years (much less a merit increase), I can understand that giving merit increases to those who don't get laid off is a "band-aid" for the issue.

However, the new hirings? That is where I am thrown for a loop. The only thing I can fathom is that the company would rather lay someone off than give them the option to relocate to a more active office, and then have to pay extra expenses to get them there and most likely a higher salary for moving.

ETA: Also, now that jobs in the financial industry are few and far between, you can hire someone new at a much lower salary with the same qualifications, do to the desperation for work. The guy you just laid off might have been making twice a much for the same job, just due to being here longer.

 

[janinegirly]

The hiring could be from specific departments that are making money. Might not be direct correlation with where layoffs are coming from. If it is, then my guess is it''s some new top guy who wants to clean house and bring on his own contacts.

I''m curious which bank you''re at..you''re in Boston right? (not to sound stalkerish

)