Companies that are losing or a looser, or I might say it correctly loosing their money or loosing from competitors are resorting to drastic moves like this company in the US, the Circuit City.
“Circuit City Stores Inc., the second-largest U.S. electronics retailer after Best Buy Co. , fired 3,400 of its highest-paid hourly workers and will hire replacements willing to work for less. The company said its eliminating jobs that paid “well above” market rates. Those who were fired can apply for the lower pay, company spokesman Bill Cimino said today. He declined to give the wages of the fired workers or the new hires.Circuit City, based in Richmond, Virginia, also hired Goldman, Sachs & Co. to study a sale of its 900 Canadian stores” – quoted from Bloomberg.Com by By Mark Clothier
This is very similar to the company I work with some time ago here in the Philippines. A manufacturer of semiconductor bonding tools who always resort to eliminating jobs. This event is nothing new to me because almost every year workers are being reduced. Maybe the employer thinks that by eliminating jobs he can reduce the overhead expenses. Yes, probably he was successful in doing so because he saves millions yearly and that equates to “profit”. But the question is, for how long?
People are the most important asset in a company. Employers can hire and fire and hire again. But the experience and training gained form the company should be valued and be of use to the company. If there is a high turnover rate, then what happens is technology is dissipated and will cost the company more due to the mistakes done by the new employees. Companies will have to train again and again. Yes it’s true that employers can save money by paying low wages but the mistakes done or the lost opportunities like for example sales or a bad experience towards a customer perhaps will cost the company more.
“A company who always counts the cost but does not know the value”
[tag]circuit city,SPT[/tag]
Posted by Manuel
Manuel Montala was an online entrepreneur who enjoys blogging about entrepreneurship and gathering information for his blog to help budding entrepreneurs. You can also reach him on twitter: http://twitter.com/mmontala
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