Yahoo Downsizing Reax

by Ben Cohen

A Huff Post reader posted this response to my article on Yahoo’s downsizing binge:

If

the company fired 2,400, yet increased profits, doesn’t that call into

the question the value that those employees were creating? BTW, what

system are we criticizing here? If we all wanted to invest our 401(k)’s

into companies that were overstaffed and unworried about profits, then

we would. But, we don’t. Funny how we all complain about Wal Mart

business practices, yet buy all of our food there. We complain about

companies that abuse the environment, yet “green” funds are largely

ignored by investors. Why? Because when you invest your savings so that

you can retire, you care about rate of return (primarily).

Nothing forces companies to go public and have shareholders that are

focused on profits. There are plenty of small and mid-size companies

that are privately owned and are willing to forego profit maximization

because they feel an obligation to their employees. But, it is a dying

breed. Why? Probably because, as drymartini1 suggests, the employees

don’t reciprocate that sense of obligation to their employers.

My response:

Steve, I think you are way off the mark here. You are arguing that

downsizing is somehow the fault of the worker. It’s a pretty inhumane

way to look at it. The fact is, corporations often shed people when

they don’t need to in order to make profits. These are people with

families who rely on their paycheck to survive. I know plenty of people

dedicated to their companies who were laid off because of cut backs.

Interestingly, their bosses never took a pay cut.

This type of ‘efficiency’ has effectively destroyed the middle class in

America and has driven wages down to a level where people simply cannot

survive on them. You bring up WalMart – a classic case were their

business model has driven local stores out with their rock bottom

prices, and forced people to work there for lower wages. They import

most of their good from China (which is much cheaper), so also drive

factories out of business. Why you think this is a good thing is beyond

me.

Read more at: http://www.huffingtonpost.com/ben-cohen/yahoo-profits-are-symbol_b_328828.html

Read more at: http://www.huffingtonpost.com/ben-cohen/yahoo-profits-are-symbol_b_328828.html

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.