Tag Archives: Carly Fiorina

HP, Adding Jobs, Cutting Jobs – But The Question Will Not Go Away, Where Will the Jobs Be?

News item:
Hewlett-Packard to lay off 27,000 employees,” (John Naughton:  Can mighty Meg Whitman save HP from terminal failure? – Massive job losses have been announced at Hewlett-Packard. Now the ailing computer company needs to put a whole string of expensive mistakes behind it)

In her message she laid the bad news on the line. “At the end of 2009 we reported a workforce of about 304,000. At the end of 2010 we had almost 325,000 employees, and at the end of 2011 that number had ballooned to nearly 350,000. Over that same period we saw year-over-year revenue growth of 10% in 2010, of 1% in 2011, and, so far in 2012, revenues have been declining.
“We’re struggling under our own weight…”

New item:  c, 1999
Carly Fiorina is the first in a series of new leaders of HP who lead the company into acquisitions, and an increase in the number of employees to get the job done for the coming years.

In 1999 HP appointed a glamorous new CEO, one Carly Fiorina.

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Meg Whitman says “lets get rid of those jobs we’ve been adding”

So, Hewlett-Packard, beginning with Fiorina and all the way up to Meg Whitman, increased their employees, bought Compaq, gave birth to and quickly scrapped an iPad “competitor” (not so much of a competitor, it turned out), and now the company is in trouble.

And so it goes.

Of all the crises we face, the big one is this – there are not enough jobs.  And I’m not smart enough to figure out where to put the blame, or where to look for the best solution(s).

Yes, it is true that Meg Whitman was brought in to right a pretty precariously sitting ship.  But it is also true that her predecessors also sought the best for the company.  (one side note:  both Carly Fiorina and Meg Whitman have run, unsuccessfully, for higher office, as Republicans).

And as company after company keeps trying to achieve or maintain profitability, as company after company seeks to enhance productivity, so that they can produce the same goods or products or services with ever-fewer workers, the overall employment picture keeps looking ever more dismal.

Picture HP over the last decade, or so.  You know exactly what they were engaged in.  They hired people; a lot of people.  In those interviews, and in those company orientation sessions, the HP officials would say, at the direction of their leaders, in one way or another:

“Come work for us and with us.  We are a great company, building a great future.  You will be a part of a company that is poised to even greater days ahead, and we need you to help make that happen.  And, this is a company that will treat you right, give you great opportunity to advance, and take good care of your needs so that you can focus on doing the best possible job.”

I suspect that speech was given over and over again.

And, it didn’t work out, and leader after leader was replaced, and now the new leader comes in, and gets rid of 27,000 employees {read that figure – 27,000 people who had been told that this was the company to build a future with!}…  And now, just imagine the morale of the folks who “survived” this current round of layoffs.

In The Coming Jobs War, Jim Clifton (Chairman of Gallup) quotes Nobel Prize-winning Economist Robert Fogel, writing:

“even if Fogel’s prediction comes almost true, it will be jobs Armageddon in America.  Its unemployment plus underemployment will rise to more than 40% (over the next couple of decades).  Leadership of the free world will not just be lost, but overwhelmed.”

I understand the argument.  A company exists to make a profit.  A company does not actually exist to provide jobs.  Jobs are among the tools companies have to make the products and provide the services that lead to profits.  And without a profit, there is no money to pay for the jobs.  And, if the work that is done by ten people can be done by nine people, and that enhances the bottom line in the profit column, then cut to nine.  (or, cut from 350,000 employees to 323,000 employees, HP’s current situation).

But…  but… what if every company cuts, and cuts, and then the total number of people who do not have jobs continues to grow?  Then, where will the demand be for the goods and services of these companies that are now so much more profitable?  Ultimately, the demand will dwindle, thus the profits will dwindle.  The cycle really is vicious, and painful to ponder.

(By the way, this loss of demand is behind Richard Florida’s call for a true increase in the wages of service workers.  He says that without an increase in service wages, demand will remain too low, and the economy will not return to what most of us would view as ”normal”).

Yesterday, there was an intriguing opinion piece in the New York TimesLet’s Be Less Productive by Tim Jackson:  “Has the pursuit of labor productivity reached its limit?

Mr. Jackson basically argues that we scale back the move to doing more with fewer employees.  In some instances, he argues that scaling this back would greatly enhance the service we receive.  For example, we’ve all read about the pressure for doctors to see more patients per hour in the hours of their day.  This cannot be good for the quality of our medical care.

Here are brief excerpts from the Jackson article:

The quest for increased productivity occupies reams of academic literature and haunts the waking hours of C.E.O.’s and finance ministers. Perhaps forgivably so: our ability to generate more output with fewer people has lifted our lives out of drudgery and delivered us a cornucopia of material wealth.
But the relentless drive for productivity may also have some natural limits. Ever-increasing productivity means that if our economies don’t continue to expand, we risk putting people out of work.

So, what is the purpose of this post?  It is to ask, again, as I have asked so often, where will the jobs be?  Jobs are threatened by automation.  Jobs are threatened by the focus on profits, thus productivity.  And, every time we turn around, the number of new jobs created comes up far short of the number of jobs that are being eliminated by these and other factors.

Thus, the need of the hour is the need for jobs.  There is a Coming Jobs War, says Clifton.  From his book:

The coming world war is an all-out global war for good jobs.
…what would fix the world – what would suddenly create worldwide peace, global wellbeing, and the next extraordinary advancements in human development, (is) 1.8 billion jobs – formal jobs.  Nothing would change the current state of humankind more.
The leadership problem is that an increasing number of people in the world are miserable, hopeless, suffering, and becoming dangerously unhappy because they don’t have an almighty good job – and in most cases, no hope of getting one.
A good job is a job with a paycheck from an employer and steady work that averages 30+ hours per week.

Though Clifton writes of a global need, it is clear that we face this challenge right here in our country.

Where will the jobs be?  On this Memorial Day, as we think about patriotism, maybe it would be a patriotic thing for our business leaders, the CEOs of companies, and the stockholders of those companies, to think, collectively, about what they can do in their companies to help move our country forward in this so very important way.

Where will the jobs be?  We need our best minds working on this.  Maybe nothing else is as important right now.

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Read the review of the lift on book by our bloggign colleague Bob Morris here — The Coming Jobs War:  A book review by Bob morris.

Read an interview with Jim Clifton about this book and its importance from Forbes here.