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The CEO and The Layoff Decision

How CIOs and their C-level peers need to work with the boss in reducing head count
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It's something that's been in the financial climate ever since the global recession began to entrench itself back in November 2007. A rollercoaster 2008, which saw unstable commodity and oil prices, coupled with devaluing currency and rising inflation, has done little to move away company decision makers and strategists from looking towards layoffs as a means of stabilising their company's future.

Global Belt Tightening

A look at a few statistics indicates layoffs are on the rise: according to the US Department of Labor, in November 2008, the US unemployment rate was 6.7 per cent, a rise of two per cent points from 2007. The number of payroll employees in the US decreased by 0.5 million in November alone (and by 1.8 million in 2008). The manufacturing sector accounted for 39 per cent of these layoffs.

A cursory look across the international news proves that this phenomenon is not US-related, but a global event. In November, Citibank announced that it was going to layoff approximately 53,000 employees in the coming quarter. This was in addition to the 22,000 jobs it had planned on cutting in October. Around the same time, HP announced 24,600 job cuts in the next three years following its acquisition of EDS.

In the same vein, retailer Marks & Spencer (M&S) recently announced the axing of up to 1,230 jobs and closing down 27 stores after a fall in Christmas sales. The dismal news continues on with car maker Mitsubishi Motors, in Japan, announcing that they will be cutting down 2000 temporary jobs by the end of March 2009. Lenovo announced that it will be reducing 2500 jobs worldwide, while Boeing announced 4500 job cuts starting next month.

The National Federation of Trade Unions of Unilever Chile accused Unilever in May 2008 of violating the rights of workers by failing to provide them with information about the closing down of its factories and preventing the workers to make the company's decisions public.

Even a company like Google has not remained lay-off free!

Pakistan has also been making news headlines. Giants within media, textile, FMCG, telecom and banking sectors have all been affected, with downsizing of existing staff and a freeze on the hiring of new resources. The list of the companies would read like a 'who's who' of Pakistan's top employers. Even the car and bike manufactures have suffered through the economic malaise. Chinese bike makers have cut jobs by 20-30 per cent in the last few months as 14 factories have been shut down since July. In another development, a Korean car assembling plant has reduced the workers' strength, while a leading Japanese car maker has already undertaken downsizing of workers and staffers.

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Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Apple, Boeing, Citibank, EDS, Google, Hewlett-Packard, HP, Lenovo, Mitsubishi, Unilever, Unilever
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