by Ben Cohen
According to Tech Crunch, internet giant Yahoo tripled its profits this quarter, boosting its income by $130 million.
As a share holder, you’d be pretty pleased, and as part of management, the picture is decidedly better than it was last year when its share price plummeted after it rejected an offer from Microsoft.
However, if you worked for Yahoo, you probably lost your job.
It turns out, Yahoo’s profits are based almost entirely on the $169 million cost cutting measures it took (2400 workers were let go), while of course protecting corporate bonuses. According to the San Fransisco Business Times, new CEO Carol Bartz was paid a $1 million salary with a possible $2 million bonus. She was also paid an “annual equity grant” of $8 million and is eligible for a “make-up grant” worth $10 million, a quarter of which paid in cash.
Those millions of dollars going to Bartz’s third and fourth vacation homes could have been used to save hundreds of jobs. But it wasn’t, and those people must now find their way in the worst jobs market in 80 years.
This isn’t a hit piece on Bartz — she probably worked extremely hard to get where she is, and deserves to be paid well for her services.
The problem is the system that allows such massive discrepancies in earnings and puts profits before people. The sad fact is that Yahoo was still profitable before it made the cuts, bringing in a net profit of $54 million in the same quarter last year. Profits were down, but given the atrocious state of the economy, it was to be expected.
A corporations sole aim is to maximize profit for its share holders. It is legally bound to deliver those profits, and a structure is in place ensure it does so regardless of the economic times. Yahoo did what was necessary to deliver those profits by stripping away its work force, revealing the ugly truth behind the modern corporate system:
A company has no duty is not to its employees. It has a duty to profit.
Why do we accept living in a society that treats us like expendable cogs in a wheel? That sacrifices families for the sake of executive bonuses?
You can spend decades building a company, pouring your life and soul into it only to be ‘let go’ when management can find someone cheaper. Our brightest students are taught that this ‘efficiency’ in business is good – that profit trumps all, that people are expendable and can be replaced. But those people are our neighbors, our friends, and our families. It is an external cost that business school does not account for.
It is insane that we accept this as a fact of life, because really, it is evil.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.