I work for a large telecom company, with over 225,000 employees and a presence throughout the US and globally. At the end of January, my company announced it would cut between 13,000 and 17,000 jobs over the course of the coming year. This is in addition to about 26,000 jobs cuts over the last two years combined. The losses are supposed to be concentrated in the wireline portions of the company. This is because the wireline services have been consistently losing money. More and more people are disconnecting their landlines and relying solely on cell phones. In such a poor economy, consumers seem to prefer to cut landlines and keep cell phones, instead of having to pay for both services. Needless to say, wireless and Internet sales have increased. This has resulted in a 2009 profit for the company. In light of this profit, there was much surprise when the layoffs were announced in January. If the company saw this increase, how can such a large number of layoffs be justified?
Even though the company posted a profit, they still experienced a huge loss related to layoff costs from 2009. For each employee that lost their job last year, they are paid a severance package. This is typically based on the number of years they have worked for the company. I personally know employees that have worked for the company for over 30 years. That amounts to a pretty large severance package for those employees. So essentially, my company has to lay off more employees in part due to the large number of layoffs from last year. They can’t afford to pay their packages. This seems like they are entering into a vicious cycle. They will lay off at least 13,000 employees this year, but what about next year? Will more need to be laid off due to the 2010 severance packages? How long will this continue?
There are additional reasons for the layoffs. The company wants to concentrate more on wireless and services delivered by fiber optics as opposed to wireline. The decision that the majority of the layoffs will be largely in the wireline groups makes sense business-wise. Still, the effect of last year’s layoffs has brought down the morale of employees. Compared to last year there are less employees to do the same amount of work. Not only are we expected to work harder and faster to compensate, but we are also afraid of losing our jobs this year. We must anticipate that next year will quite possibly be the same.
Subscribe to:
Post Comments (Atom)
The anticipation of layoffs is very difficult. I recently went through something similar where we were told we were going to experience layoffs after an assessment of job functions (which lasted about a year). It was quite stressful for the staff and morale sank lower than I have seen it in my 10+ years at the firm. The senior managers in my dept tried to communicate as transparent as possible. Sometimes that lead to more frustrations since there wasn't any answers but I feel lucky they tried and are still trying to communicate openly.
ReplyDeleteDo you feel management is trying to improve morale? If so, what are they doing?
Shelley, I do not feel management is trying to improve morale. They acknowledge that layoffs are a hard thing to go through, but besides that I don't feel they do anything to help. My manager in particular purposely keeps layoff-related information from us because he thinks he is protecting us. What that really does is keep us in the dark about what's going on and stresses us out more. We have to get info from other groups whose managers are more open.
ReplyDelete