Reply to post: Re: I notice my bigcorp is taking the hint from IBM and HP

IBM's contractor crackdown continues: Survivors refusing pay cut have hours reduced

DougS Silver badge

Re: I notice my bigcorp is taking the hint from IBM and HP

They're not taking their hint from IBM and HP, they're taking their hint from Wall Street. The market is overvalued right now, with overly high P/E ratios. Stocks that can't make earnings to justify their valuations will be punished in favor of those who do, and stock prices going down hurts senior management who typically have stock options or bonuses based on "shareholder value" (which unfortunately is shorthand for stock price, because compensation committees are lazy)

They respond with cost cutting measures to save quarterly results because failure to make quarterly numbers hits them in the wallet. Once they reach a point where even extreme cost cutting won't allow them to make the numbers they'll either leave for another job, or try to bring forward a bunch of expenses to make a few quarters REALLY bad, to lower Wall Street expectations and set them up for making big bonuses next year for their "recovery". Short term measures lead to short term management.

Don't worry, when the inevitable correction hits, it will be easier to make targets, and the pressure will be off. Assuming your company is actually healthy, and not in dire circumstances like IBM and HP. HP has been in cost cutting mode for about 15 years now, and now that they've driven away all the competent people the chickens are coming home to roost. IBM didn't have that head start, but they're doing their best to catch up in only a few years' time.

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