Like, Company A posts 5 Billion in profits. But if they post 4.9 billion in profits next year it’s a serious failing on the company’s part, so they layoff 20% of their employees to ensure profits. Am I reading this wrong?
In: Economics
It’s not tenable in the long term. I worked for almost 20 years in a highly regulated industry where our prices were held basically at the same level for years at a time, but we were expected to grow profits every year in spite of that. The first couple of years axed things like training, business-related travel, and marketing. Then they killed the pension plan and quadrupled the price of our health insurance. After that, we had to start cutting staffing levels by 5-6% every year to meet the growth targets. Meanwhile, our CEO’s compensation increased by 400% over that time period. I changed employers at that point, only to see the new company follow the same basic steps over the next decade.
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