The valuable assets your competition is giving away

Classic photo of a distress sale -- Great Depression $100 will buy this car
Creative Commons License photo credit: onohoku

I‘ve always been amazed that a large company can lay off 20,000 or 30,000 workers and not fail soon after. These days, layoffs of 5,000 to 20,000 are regularly in the news.

In January 2009, 241,749 people were laid off across the U.S. â?? and that likely only counts the firms large enough that they have to report layoffs to the U.S. Department of Labor.

It likely doesn’t include the people who are working fewer shifts or short shifts. Not a layoff, but just as impactful to those folks. That number could easily be in the millions.

Still, it’s the companies with tens of thousands too many white collar workers that are stunning.

What are they thinking?

If you can lay off 30,000 workers next week â?? what in the name of standing around the water cooler are that many people doing to create value and generate revenue this week?

How critical could their work really be if a company can afford to send that many people home with less than a day’s notice?

Weâ??re not just talking about manufacturing companies where an extended shortage of orders could result in having too many people on staff. Even in that sort of environment, sales don’t change so quickly that 30,000 people who are providing value and generating revenue on Monday are suddenly not needed on Tuesday.

What management team would allow such a glut to get to the point where you’d not only have to lay that many people off, but you’d have to do it all at once?

How was the performance of those people being evaluated?

For that matter, how was the management over those folks being evaluated if their company could afford to layoff that many with one massive cut?

Gluttony: Also one of the seven deadly business sins

Just so you get an idea what kind of impact we’re talking about, let’s do a little math. 30,000 people who are paid an average of $35,000 a year is a total payroll of ONE BILLION, 50 MILLION dollars. 20 million bucks a week.

That doesn’t count benefits, the employer half of SSI and Medicare, unemployment insurance (much less the increase caused by laying off 30,000 people – YOW) and so on â?? nor does it count the human resources team necessary to handle the various work that has to be done to handle the paperwork and such that’s necessary for 30,000 workers.

Nor does it count the office space necessary to house that many people and all the assets necessary to give them something to do (desks, computers, chairs, etc).

How do you waste $20,000,000 a week â?? plus all those costs – on that many people who are easily expendable (proven by the ability to lay them off all at once). How can you afford to discard the experience and business knowledge that 30,000 people have gained in your industry?

Doesn’t make much sense, does it?

What about your business?

For the small business owner â?? it’s not just a cash flow issue, it’s about not hiring people you don’t need, being smart about the ones you do hire, and cross-training the team you do have so that you don’t ever have to lay them off.

There are a few large companies who have never laid someone off. You can read about them here: http://money.cnn.com/galleries/2009/fortune/0901/gallery.no_layoffs.fortune/

As for everyone else – now is the time to strengthen your business, train your people, test new product lines and services and start competing harder in your market while many of your competitors are in a possibly weakened condition.

If your direct competitors – or those in similar fields – are laying off people,  put the word out on the street that you’re interviewing.

Why? So you can get a look at the folks everyone else has laid off. There just might be a gem in the bunch.

Why not use their sharpest knife against them?