A Rant from an Unimpressed Business Student

The second wave of the Calamity occurred yesterday. A few more faces will be gone after this year. In all honesty I do not know what the top management are trying to do. You have a 80 million dollars deficit and your idea of reducing it is to cut staff and implement ‘re-engineering’. Nothing wrong with the latter of course. The way the business has been run, it is no surprise that it has posted losses for two consecutive years. Some business arms are clearly a waste of resources. Take for instance, those jokers in India. They have been misbalancing the accounts since August and now only they realized that they have an imbalance of some $800,000. I say that is real smart of them. It has been an eternity since Amazon, Borders and Kinokuniya started selling books online but the management, in their wisdom, only began to do it last month in this sinkhole. We are not talking about some obscure Chinese family-run operation., but an MNC with a history spanning over a century.

Assuming that each of the 90 laid off earns an average of $3,000, the gulag will save some $270,000 monthly. In a year this amounts to roughly 3.24 million. It will take maybe 24 years for this 'staff savings' to shave off the loss, and we have not even factored in inflation, raising costs and other economic factors. Meanwhile, there is absolutely no guarantee that the business will recover within the next few years. When you are posting an 80 million loss the rot must have been deep and any attempts must be strategic rather than tactical and short-term. The management probably justified that the people they are getting rid of are dead weight and with their shiny new ‘re-engineering’ process, they will be able to turn the remaining into human capital which they can exploit to their maximum advantage.

I think they are seriously deluded. Top management and academics are all alike. They live in their ivory tower and take reports and spreadsheets like gospel truth, never considering that things can fuck up and they almost always will. There are intangible things and these never show up on Excel spreadsheets and nicely drafted papers. How do you put a value on morale, leadership and relationships? You can’t. Whatever you come up with is only an estimate, and like forecasts, all estimates are inherently false.

They are closing one department in this sinkhole, only to set up another in Malaysia. I say, that is most brilliant of them. While I may have a low regard for Singaporeans in general, I must admit that when it comes to work, our neighbors are simply not in our class in terms of efficiency and effectiveness. In many industries, our mediocre would be average over there. And our average could jolly well look forward to a promotion if they ever choose to work across the border. Wages may be cheaper there, but lower costs do not necessarily translate to a more impressive balance sheet. We are not talking about labor-intensive jobs (which the said defunct department is not), but a skilled, service-oriented outfit. You just cannot compare it in dollars and cents alone. Skill, knowledge, ability and experience play a part too.

Anyone who read the news a while back may remember the accidents an Australian airline suffered in the space of two weeks after they outsourced their maintenance to Malaysia and Indonesia. Cheaper does not mean better performance. In this case, things ended up worse. Finally, setting up the same department in Malaysia does not mean it will make money. It could end up being another white elephant. Although our said department might not have been performing, their failure could well be due to the terrible economic conditions, and not on any fault on their part.

Americans are generally not known for their intelligence and in this case, their short-sightedness is there for all to see. In a recession, you should avoid retrenchment. Instead, you should think of ways to make your operations more efficient. You should not treat the people who have slaved for you like resources that you can jettison when things do not go right. By your callous treatment is your workforce demoralized, and business being like war, any commander will tell you that you may have the best technologies, tactics and strategies, but when your soldiers lose the heart to fight, you will lose the war. By making every effort to keep your staff, you send out a clear signal that they are valued. The improved morale will eventually translate into a better profit margin. By retaining them, you ensure that you have a ready workforce when the economy and your business recover. In a recovering market when people are looser with their purse-strings, the last thing you want is to have no capable people to tap into the customer pool. Not only do you need new hires, you have to expend time and resources training them. You will lag behind your competitors as a result.

If the gulag wants to get rid of dead weight, why not start from the TOP? The lower management and the rank and file DID NOT cause most of the astronomical losses. It is the hair-brained and flawed business strategies the ‘Peter Pans’ in corporate management that came up with. STOP blaming every fuck thing on the stupid economy. Most MNCs are having their revenues reduced; this gulag is not alone. But do take note that few companies outside of Wall Street had an 80 million loss. It is time those in corporate management take responsibility for their abject failures, instead of making other people suffer for their blithering incompetence.